Sale will Strengthen Genting Hong Kong as it Embarks on Completing two “Global Class” ships for Dream Cruises, the first of which will be delivered in early 2021 and the second in early 2022
Genting Hong Kong (GHK) today announced an agreement for TPG Capital Asia, TPG Growth and Ontario Teachers’ Pension Plan (Ontario Teachers’) to acquire up to a 35% equity interest in Dream Cruises, one of the leading cruise brands owned by GHK.
The consideration for the 35% equity interest is US$489 million, valuing Dream Cruises total equity at US$1,397 million. With assumption of net debt of US$1,871 million, the enterprise value of the transaction is US$3,268 million. The transaction will result in a gain of approximately US$470 million, which will increase the net asset value of each GHK shares by US 5.5 cents or HK 43 cents.
The purchase will be made in two tranches, with the first guaranteed tranche of at least 24.5% for US$342 million expected in September, and a second tranche of up to 35% in total expected by December of 2019. Additional incentive payments will be paid on achievement of certain profitability level of Dream Cruises and delivery of each of the Global Class ships.
“Dream Cruises is the premium brand for the fast growing Asian-sourced cruise passenger, with the vision that they will be able to cruise globally in all regions of the world with Dream Cruises,” said Tan Sri KT Lim, Chairman and CEO of GHK. “The investment by TPG and Ontario Teachers’ will help Dream Cruises to have the youngest and technologically most advanced fleet of quality German built cruise ships with legendary Asian service. And we are delighted to partner again with TPG as we did on Norwegian Cruise Line Holdings Ltd. in 2008,” he added.
“Dream Cruises is an iconic and innovative brand with a strong product offering that is well positioned in an attractive industry which will benefit directly from rising Asian wealth and outbound tourism.” said Ganen Sarvananthan, Co-Managing Partner of TPG Capital Asia.
“TPG Capital Asia and TPG Growth are delighted to partner again with Genting HK and Ontario Teachers’ in developing an Asian cruise brand, leveraging the years of experience that Genting HK has had in this sector. We look forward to contributing in our own way to this partnership.”
“The investment is a testament of Ontario Teachers’ positive view on longer term growth in Asia and is part of our continued drive to expand our global footprint by strengthening our local presence in Asia. It is an excellent example of our commitment to work alongside quality partners that are highly experienced in investing and operating in the region.” said Ben Chan, Regional Managing Director, Asia Pacific at Ontario Teachers’.
Sea News, August 12