Life Buoy Posted May 5, 2020 #1 Share Posted May 5, 2020 NCL is now , in the words of CNBC, "in survival mode". Should RCL consider making an offer for all or part of NCL? I believe that Oceania and Regent would fill some gaps in RCL offerings and if they can get them at a deep discount might be worth the risk. This is a hypothetical question and might and I hope will make for some interesting comments. Link to comment Share on other sites More sharing options...
ipeeinthepool Posted May 5, 2020 #2 Share Posted May 5, 2020 5 minutes ago, Life Buoy said: NCL is now , in the words of CNBC, "in survival mode". Should RCL consider making an offer for all or part of NCL? I believe that Oceania and Regent would fill some gaps in RCL offerings and if they can get them at a deep discount might be worth the risk. This is a hypothetical question and might and I hope will make for some interesting comments. Nope. RCL has all of the ships it needs and maybe a few too many. RCL can enter any of NCL's markets with the ships it already owns with little extra cost. 4 1 Link to comment Share on other sites More sharing options...
Bo1953 Posted May 5, 2020 #3 Share Posted May 5, 2020 Yes, I think it would be a great investment and make some changes there as well.... to bring the line into 'general' client demographics as the other sister lines... a natural feeder, as it were. bon voyage Link to comment Share on other sites More sharing options...
The_Big_M Posted May 5, 2020 #4 Share Posted May 5, 2020 Only if they want to accelerate their own move into financial distress. In a word, no. 9 Link to comment Share on other sites More sharing options...
Fouremco Posted May 5, 2020 #5 Share Posted May 5, 2020 With what funds would they make the purchase, even at discounted prices? 9 Link to comment Share on other sites More sharing options...
BigAl94 Posted May 5, 2020 #6 Share Posted May 5, 2020 No, RCL have enough troubles of its own, not the time for any acquisition. 4 Link to comment Share on other sites More sharing options...
Rare markeb Posted May 5, 2020 #7 Share Posted May 5, 2020 (edited) Why? And where would they get the credit? I think they’re about as extended as they can get. The cruise industry is arguably one of the truest luxury products on the market. Even bespoke clothing and designer shoes still serve a utilitarian function. No one has to cruise in this day and age. Ocean liners were transportation; wide body jets do that today. If I were RCCL and looking to invest, I’d be reducing rather than increasing my exposure to that dynamic. Even if it were looking at all inclusives or the like. No way I’d buy another pure luxury product. But I would love to see the look on the M&A guy’s face, both the pitcher and receiver! Edited May 5, 2020 by markeb 1 Link to comment Share on other sites More sharing options...
pl281 Posted May 5, 2020 #8 Share Posted May 5, 2020 If they were do anything I would see merging Oceana with Azamara Club as I believe that the 2 lines draw similar audiences and with the exception of the 2 new builds from Oceana - They operate the same R Ships - This would give them all except one of the R Class ships - (the other is with Princess) I believe Royal has 11B in credit lines right now - It would be interesting to see if this model could work. Link to comment Share on other sites More sharing options...
Orator Posted May 5, 2020 #9 Share Posted May 5, 2020 20 minutes ago, pl281 said: If they were do anything I would see merging Oceana with Azamara Club as I believe that the 2 lines draw similar audiences and with the exception of the 2 new builds from Oceana - They operate the same R Ships - This would give them all except one of the R Class ships - (the other is with Princess) I believe Royal has 11B in credit lines right now - It would be interesting to see if this model could work. Adding Oceania to Azamara makes sense. They could also add Regent to their Silversea position. The rest make no sense to me. Money is usually not a problem if the investment community believes that they could realize great profits on their investment. 1 Link to comment Share on other sites More sharing options...
Happy Cruiser 6143 Posted May 5, 2020 #10 Share Posted May 5, 2020 The Oceania (new builds only) and Regent moves would make sense if RCI were not already so heavily leveraged. But they have way too much debt and commitments for big ships, which may not be the way to go in the future. 1 Link to comment Share on other sites More sharing options...
TeaBag Posted May 5, 2020 #11 Share Posted May 5, 2020 Beyond has been put on hold. Why would they need more ships (debt)? I say no. Link to comment Share on other sites More sharing options...
Baron Barracuda Posted May 5, 2020 #12 Share Posted May 5, 2020 If Royal were in better financial shape Oceania and Regent would make some sense. Could realize synergies by folding the ships into existing RCL divisions and eliminating shore based staff. Unfortunately in the current environment RCL is better off holding onto every dollar of precious cash. 1 Link to comment Share on other sites More sharing options...
Roger88 Posted May 5, 2020 #13 Share Posted May 5, 2020 I wont be surprised at all if this happens. I mean its a very logical thing to do. When one company experience difficulties, another will always be there to help.. or to take over. Royal stands for its name and it totally has all it needs to capture smaller companies Link to comment Share on other sites More sharing options...
az_tchr Posted May 5, 2020 #14 Share Posted May 5, 2020 What would RCL use for money? Already heavily leveraged. As said the R ships with Oceania are the only ships that make sense. The real issue is if no or little cruising till 2021 the RCL will be out of cash too. If cruising resumes shortly then NCL won't need cash. Link to comment Share on other sites More sharing options...
Mr. Click Posted May 5, 2020 #15 Share Posted May 5, 2020 RCL and its subsideraries owe millions of dollars in refunds. They need to deal with those before they can think about expanding. The other side of that coin is if RCL bought any other lines outright would they also take that lines refund responsibility as well as their other debt? Realisticly this is not the time to be expanding and adding capacity. Link to comment Share on other sites More sharing options...
Rare shipshape sam Posted May 5, 2020 #16 Share Posted May 5, 2020 1 hour ago, Mr. Click said: RCL and its subsideraries owe millions of dollars in refunds. They need to deal with those before they can think about expanding. The other side of that coin is if RCL bought any other lines outright would they also take that lines refund responsibility as well as their other debt? Realisticly this is not the time to be expanding and adding capacity. Depends. RCL could be making an Asset purchase, ie ships, etc. It could be making a stock purchase which would include the other companies debts. Could do a blended transaction, where they are buying assets and assuming appropriate debt attached to those assets. There may also be a number of 'strings' currently attached to companies selling their assets. Lenders tend to lock up the assets used as collateral and restrict the sale of those assets without satisfying the associated debt. Link to comment Share on other sites More sharing options...
Rare mahdnc Posted May 5, 2020 #17 Share Posted May 5, 2020 4 hours ago, Life Buoy said: NCL is now , in the words of CNBC, "in survival mode". Should RCL consider making an offer for all or part of NCL? I believe that Oceania and Regent would fill some gaps in RCL offerings and if they can get them at a deep discount might be worth the risk. This is a hypothetical question and might and I hope will make for some interesting comments. No, I wouldn't think so. If anything, I am wondering if RCL is considering divestiture (Celebrity, Azamara, etc). I doubt that, too, because they wouldn't get much for them right now and there aren't that many buyers out there. Link to comment Share on other sites More sharing options...
jimmieg Posted May 5, 2020 #18 Share Posted May 5, 2020 Right now it seems NCL is offering equity and a board seat, for cash. Not outright sale of assets. If you want to buy assets, buy them cheap in bankruptcy where there will be little competition. No bank or investment firm wants to own a cruise ship. Link to comment Share on other sites More sharing options...
Rare hcat Posted May 5, 2020 #19 Share Posted May 5, 2020 (edited) NO! Not just based on the finances. IMO: Other than Norwegians' top brands this hypothetical acquisition would represent a further downgrade of Royal C' s cruise experience.. .. Wish they would let Celebrity and Azamara form their own company...small but special! The way Celebrity used to be before Royal ruined X Edited May 5, 2020 by hcat 5 1 Link to comment Share on other sites More sharing options...
TeaBag Posted May 5, 2020 #20 Share Posted May 5, 2020 Well said, hcat. That would be perfect. Link to comment Share on other sites More sharing options...
Rare markeb Posted May 5, 2020 #21 Share Posted May 5, 2020 1 hour ago, jimmieg said: Right now it seems NCL is offering equity and a board seat, for cash. Not outright sale of assets. If you want to buy assets, buy them cheap in bankruptcy where there will be little competition. No bank or investment firm wants to own a cruise ship. Not a finance guy or a mergers and acquisition guy, but this sounds like NCL has dripped blood in the water. I'd wait for the carrion rather than fighting to make the kill... If for some reason RCCL wants some NCL assets, pick them up at auction after NCL belly's up. And they just opened the door on that possibility. Link to comment Share on other sites More sharing options...
Rare markeb Posted May 5, 2020 #22 Share Posted May 5, 2020 1 hour ago, hcat said: NO! Not just based on the finances. IMO: Other than Norwegians' top brands this hypothetical acquisition would represent a further downgrade of Royal C' s cruise experience.. .. Wish they would let Celebrity and Azamara form their own company...small but special! The way Celebrity used to be before Royal ruined X Just now, TeaBag said: Well said, hcat. That would be perfect. Given that there are no independent financials on Celebrity or Azamara (we're talking money here; not emotion), I have no idea if that would make sense. It's entirely possible that Royal's position allows Celebrity to be Celebrity. We don't know. Once upon a time, the Citation probably allowed Chevrolet to have the assets to make a better Corvette. Would Corvette have survived as a standalone brand? Link to comment Share on other sites More sharing options...
radarcruiser Posted May 5, 2020 #23 Share Posted May 5, 2020 What could they possibly use to purchase NCL? They are pretty much busted now. It would be like a drunk at 1am trying to overdraw his account at an ATM to buy another 6-pack. 1 Link to comment Share on other sites More sharing options...
jimmieg Posted May 5, 2020 #24 Share Posted May 5, 2020 36 minutes ago, markeb said: Not a finance guy or a mergers and acquisition guy, but this sounds like NCL has dripped blood in the water. I'd wait for the carrion rather than fighting to make the kill... If for some reason RCCL wants some NCL assets, pick them up at auction after NCL belly's up. And they just opened the door on that possibility. That's my take on it. Buffet just sold his airline positions, doubt he'd want a ship. CCL and RCL don't have extra dollars for expansion. Seems to me the buyer pool is small. Link to comment Share on other sites More sharing options...
Mr. Click Posted May 5, 2020 #25 Share Posted May 5, 2020 2 hours ago, shipshape sam said: Depends. RCL could be making an Asset purchase, ie ships, etc. It could be making a stock purchase which would include the other companies debts. Could do a blended transaction, where they are buying assets and assuming appropriate debt attached to those assets. There may also be a number of 'strings' currently attached to companies selling their assets. Lenders tend to lock up the assets used as collateral and restrict the sale of those assets without satisfying the associated debt. I totally agree with you. There are lots of options, lots of ways to make a deal but right now I don't see RCL or any other cruise company having the cash to make a deal. The big question remains if NCL goes into bankruptcy would they go chapter 11 and try to reorganize or just give it up and go chapter 7, I?f they went Chapter 7 then we could see a fire sale on assets. Airplanes can be parked in the desert but parking cruise ships? wow that would be really expensive. Link to comment Share on other sites More sharing options...
Recommended Posts
Please sign in to comment
You will be able to leave a comment after signing in
Sign In Now