Thoughts on a potential NCL acquisition of Genting Cruise Lines or Dream Cruises?

[Beezo]

Ok I know this is far-fetched given the cash positions the cruise lines are in today, BUT, what are your thoughts on a potential acquisition/deal between NCL and Dream Cruises? The Genting Dream and World Dream are in the same design class as the Breakaway and Getaway, as well as Explorer Dream as the sister to Norwegian Spirit from their Star Cruises days . From a cost perspective and running “like” ships it can be very cost effective, as well as Explorer Dreams $50M upgrade in 2019. NCL could either full integrate the ships into the fleet, or continue to run them in the Asian market. Could also go as far as continuing the construction of Global Dream (towing to another yard - which they have done multiple times in the past) to complete construction.

 

Thoughts?

[dexddd]

Welcome to CC.

[ColeThornton]

8 hours ago, Beezo said:

Ok I know this is far-fetched given the cash positions the cruise lines are in today

 

 

Yes, it is far fetched at this time.

[Lionkingrichard]

Genting Hong Kong halted payments on debts of almost $3.4 billion in 2020.

 

Ships will go to the highest bidder.

 

I will start! $1.00

[LGW59]

13 hours ago, Beezo said:

Ok I know this is far-fetched given the cash positions the cruise lines are in today, BUT, what are your thoughts on a potential acquisition/deal between NCL and Dream Cruises? The Genting Dream and World Dream are in the same design class as the Breakaway and Getaway, as well as Explorer Dream as the sister to Norwegian Spirit from their Star Cruises days . From a cost perspective and running “like” ships it can be very cost effective, as well as Explorer Dreams $50M upgrade in 2019. NCL could either full integrate the ships into the fleet, or continue to run them in the Asian market. Could also go as far as continuing the construction of Global Dream (towing to another yard - which they have done multiple times in the past) to complete construction.

 

Thoughts?

time to wake up, though it sounds like it was a nice dream

[SliderNc]

14 minutes ago, Lionkingrichard said:

Genting Hong Kong halted payments on debts of almost $3.4 billion in 2020.

 

Ships will go to the highest bidder.

 

I will start! $1.00

Sadly, I will outbid you at $1.10.

 

I doubt any cruise lines will buy any other cruise lines at this point, regardless of the synergies.  Many of them are already stretched thin on their cash reserves and balance sheets and have asked for loan payment deferment as well.

[njhorseman]

Cruise lines are struggling to keep their heads above water as it is. The last thing any cruise line needs right now is to buy another cruise line that's in bankruptcy.

 

If there's any interest in purchasing one or more of Genting HK's cruise lines it's going to come from a private equity firm that's sitting on a wad of cash, just as Apollo Management bought controlling interest in NCL from Genting in 2007 and Sycamore Partners bought Azamara from Royal Caribbean in 2021.

[BermudaBound2014]

I'm more inclinded to believe NCL will find themselves in a similiar situation as Genting. The fallout is just beginning and this has the potential to be a brutal bloodbath.

[Two Wheels Only]

15 hours ago, Beezo said:

Could also go as far as continuing the construction of Global Dream (towing to another yard - which they have done multiple times in the past) to complete construction.

 

 

Give me a paintbrush, some paint, and the furniture and I'll have that ship ready for passengers in no time. 😆

[mscdivina2016]

17 hours ago, Beezo said:

Ok I know this is far-fetched given the cash positions the cruise lines are in today, BUT, what are your thoughts on a potential acquisition/deal between NCL and Dream Cruises? The Genting Dream and World Dream are in the same design class as the Breakaway and Getaway, as well as Explorer Dream as the sister to Norwegian Spirit from their Star Cruises days . From a cost perspective and running “like” ships it can be very cost effective, as well as Explorer Dreams $50M upgrade in 2019. NCL could either full integrate the ships into the fleet, or continue to run them in the Asian market. Could also go as far as continuing the construction of Global Dream (towing to another yard - which they have done multiple times in the past) to complete construction.

 

Thoughts?

LOL.  They can barely pay the bills now. Actually they recently borrowed more money.

The only scenario I could see is MSC as they are private owned and covid has made them more money than before with the mega shipping fleet.

[mking8288]

These displaced Gentling crews and officers in assorted ranks should be easily matched to other ship lines looking for experienced & trained help to come onboard, and can quickly acquire the personnel. 

[kenns]

Agreed that this is far fetched / unlikely given NCL’s current financial situation. The company is relatively stable for now but has a lot of new debt due to borrowings and whatnot due to Covid. However, stranger things have happened and you never know. 
 

There is an article on a cruise employee website that says multiple interested parties are already in talks with Genting about acquiring the shipyard and/or the World Dream ship being built. 
 

I’d put my money on MSC or a private equity firm as the ultimate “winners” for the assets. 

[Cruiser_1977]

@kenns I was just going to say I would place my money on Private Equity. I did read that there is a shareholder in Genting Hong Kong and it's sister companies that is a Billionaire (Lim Thay, maybe?) and he may attempt to bail out the cruiseline/shipyard businesses.

 

*just found out that Lim Kok Thay is the son of the founder of the Genting Group.

Edited January 25, 2022 by JennyB1977

[Beezo]

I think we are starting to see how this will play out. Here are my predictions:

 

*Star Cruises will shutdown entirely. The former Norwegian Wind (SuperStar Aquarius) Norwegian Dream (SuperStar Gemini) and Star Pisces are currently for sale according to Yacht World. Possibly scrapped based on age and lack of balconies. 

*Crystal Cruises will shutdown, unless brand is bought. I read today they officially shutdown the cruise line, letting office staff go this week and liquidators appointed V.Ships to manage the fleet. 

*Dream Cruises was wound up last week, even after the parent company itself was wound up in January. I think they will do whatever they can to maintain Dream Cruises and the other primary Genting entity (not bankrupt) will attempt to acquire the ships and/or entire brand from liquidation. 

 

Edited February 9, 2022 by Beezo

[kayjaypea42]

I wonder if anyone will purchase the ships to use as hotels?  I know Dubai has purchased a few cruiseliners and converted them into 5-star hotels...

[graphicguy]

NONE of the cruise lines are in a cash position or any position for that matter to take on more debt.  Ships will be scrapped to pay off debt in any restructuring/liquidation.

 

Crystal is no more.  Could some company, way down the road, try to revive the Crystal name?  I consider that about as likely as Costa reviving the Concordia name for a cruise ship.

[njhorseman]

2 hours ago, kayjaypea42 said:

I wonder if anyone will purchase the ships to use as hotels?  I know Dubai has purchased a few cruiseliners and converted them into 5-star hotels...

I only know of one former ship being used as a hotel in Dubai, the QE II . 

I think there's zero chance of Crystal's small ships being converted to hotels. Hotels, just as other aspects of the travel and leisure business, have suffered mightily during the pandemic and if anything there's an oversupply of hotel rooms, not a shortage.

[chengkp75]

1 hour ago, njhorseman said:

I only know of one former ship being used as a hotel in Dubai, the QE II .

 

3 hours ago, kayjaypea42 said:

I wonder if anyone will purchase the ships to use as hotels?  I know Dubai has purchased a few cruiseliners and converted them into 5-star hotels...

Yes, the QE2 is an iconic ocean liner.  There is nothing to distinguish the Crystal ships as being worthy of spending the millions to turn it into a hotel.

[njhorseman]

10 minutes ago, chengkp75 said:

 

Yes, the QE2 is an iconic ocean liner.  There is nothing to distinguish the Crystal ships as being worthy of spending the millions to turn it into a hotel.

And just being an iconic ocean  liner doesn't guarantee success as a hotel. Look at the Queen Mary in Long Beach, which has been plagued by financial losses, bankruptcies of a number of companies that held operating leases and physical deterioration so serious that millions in repairs are necessary to make it safe for public use. The pandemic was the last straw and she has been closed for almost two years now.

[Trimone]

I believe a corporation brought a cruise ship last year and afterwards were unable to insure it, it got scrapped in Turkey with all the others

[mscdivina2016]

5 hours ago, Trimone said:

I believe a corporation brought a cruise ship last year and afterwards were unable to insure it, it got scrapped in Turkey with all the others

You are referring to the MS Satoshi that was supposed to be anchored off the coast of Panama. I actually bid on a cabin when the auction started. 

 You are correct, they could not get an insurer.

[delinquentcanadian]

On 1/19/2022 at 11:43 PM, Beezo said:

Ok I know this is far-fetched given the cash positions the cruise lines are in today, BUT, what are your thoughts on a potential acquisition/deal between NCL and Dream Cruises? The Genting Dream and World Dream are in the same design class as the Breakaway and Getaway, as well as Explorer Dream as the sister to Norwegian Spirit from their Star Cruises days . From a cost perspective and running “like” ships it can be very cost effective, as well as Explorer Dreams $50M upgrade in 2019. NCL could either full integrate the ships into the fleet, or continue to run them in the Asian market. Could also go as far as continuing the construction of Global Dream (towing to another yard - which they have done multiple times in the past) to complete construction.

 

Thoughts?

Agreed this might not happen. However, it would be a reasonable and good move for NCL is able to score a good deal on those ships, maybe through creative financing strategies like a lease option or something like that.  NCL has experience in running the ships that Dream has and it would be more cost effective if Spirit wasn't the only ship in its class.  NCL just spent $100 million completely overhauling the Spirit in 2020 (seems like they are not as broke as we thought they were), the most extensive renovation of the Norwegian Edge campaign.  It would be economically wise if NCL can reuse the same designs on another identical ship.

 

While other mass market cruise lines like Carnival and RCCL have been focused on offering mega-ships and dropping their late 90s vessels, NCL has a bunch of ships that are below or in the low 100,000 GT range.  This is a niche that they could really develop, and cultivate a "cheap-chic" image with nicer interiors, better food and unlimited drink packages while being family and budget friendly, not too different from Target vs. Walmart. NCL is the only of the big three not to dispose of their ships during the pandemic, so it seems that their business is relatively sound.

 

The Chinese market has always been more difficult to operate in for major cruise lines because of its different cultures and government regulations. NCL tried to break into the market with the Joy only to leave 2 years later due to problems dealing with the CCP's political spats with Korea and Japan, forcing their ships to reroute, and misbehaving passengers who would yell at crew members, litter and spit on carpets (I've sailed out Shanghai so I know first hand). Food waste was also a major issue with the buffets.  Others have complained here on CruiseCritic on how Dream Cruises was the worst cruise line they've sailed on in Australia, how the ship's only main attraction was a massive casino and how the food was sh*t and so on. Worse still, Dream Cruises is the only cruise line that I know of who swipes your key card at complimentary restaurants and only allows one meal per sitting. So if you change your mind after you sat down at the buffet to go to the main dining room instead for dinner, you're out of luck until the next day.  This is obviously a policy geared towards the problems of the Chinese market, but would seriously tarnish the reputation of global brands like NCL.  By acquiring the Dream Cruises banner, NCL can try to profit from the Chinese market while keeping themselves at arms length.

 

The Global Class ships also present a unique opportunity for NCL to complete with the juggernauts like Carnival and RCCL. NCL have been pretty aggressive in adding unique and increasingly over-the-top amenities in recent years, (go carts at sea is a great example). If completed, the Global Dream would feature a fully fledged amusement park on the top deck that includes a roller coaster, bumper cars and more. NCL taking owner ship with the global class ships would put them in competition with the new Carnival Excellence Class ships. NCL has the real potential  to lure away their customers by offering equivalent amenities while also providing first class experience like the Haven, high quality restaurants like Cagney's and generous Free At Sea packages, all of which are absent on Carnival. NCL has a chance here to kick their asses.

 

TLDR:.NCL and Genting have a connected history, the latter being the owner of the former in the 2000s. Would be awesome as a cruise ship nerd myself to see all the Breakaway and Leo class ships united under one company 🙂

[delinquentcanadian]

On 1/19/2022 at 11:43 PM, Beezo said:

Could also go as far as continuing the construction of Global Dream (towing to another yard - which they have done multiple times in the past) to complete construction.

Sure, unlike Carnival or RCCL, NCL's fleet have a varied and interesting history, like taking over unfinished Costa Olympia from Bremer Vulkan or the endless money pit that was the Pride of America. Former ships intended for Star Cruises ended up rebranded as NCL before the entered service (Dawn & Star).  Seems like they have a history of scooping up good deals this way so would be in line with company tradition if they did this today.  They can instantly gain 2 barely used ships and 1 that has a proven track record, not to mention 2 future mega ships that could replace some of the future Project Leonardo stuff. 

Edited March 5, 2022 by delinquentcanadian
typo

[delinquentcanadian]

Bit of imagination, predictions for names if this come true. Feel free to make your own 😄

Explorer Dream - NCL Charm/ NCL Soul

Genting Dream - NCL Dream II

World Dream - NCL Muse/ NCL Fantasy

Global Dream - NCL Atlas

Reunion Dream - NCL Quest.

Edited March 5, 2022 by delinquentcanadian

[BermudaBound2014]

16 hours ago, delinquentcanadian said:

 (seems like they are not as broke as we thought they were)

Let me guess- you’re long?  
 

You are glaringly missing several key factors. 

 

 

https://www.nclhltd.com/investors/financial-information/financial-results