Oceania "divorcing" NCLH

[GeorgesGal]

I've read that Oceania will, once again, be on its own, ceasing its relationship with  NCLH at some time in the future.  Does anyone have any idea when this might occur?

 

Another question, for which I believe I know the answer, is how long if at all the stockholder benefit for owning NCLH will last after the break?

 

Number three is will Oceania be issuing its own stock, or will it be privately held?

 

Inquiring minds wants to know!

Donna

Edited March 17, 2021 by GeorgesGal

[cdcummings]

If that is true, that is a remarkable development, and it would certainly trigger a Form 8-K filing with the SEC. As of now, I do not see any such filing on their investor relations site. Would you mind sharing the source of your information?

 

Indulging in speculation, the private equity firms are undertaking a dramatic number of deals in travel and other industries right now. It would not surprise me if NCLH were to spin off Oceania in a fashion similar to RCI and Azamara. It would likely be a deal to take Oceania private for a period of years, then to restructure it through so-called value engineering, and then take it public sometime in the future. In that hypothetical case, the shareholder benefit would terminate when your shares are redeemed and the deal closes but would likely not impact discounts already applied to existing bookings.

 

It is worth nothing that NCLH is still struggling with extraordinary cash burn; just this month, they announced offerings of over 50,000,000 additional shares to satisfy their current operating costs and future debt repayment obligations. With those extraordinary measures underway, I am sure that NCLH is looking at all "strategic" options, including spinning off one or more subsidiaries. Given the synergies and shared resources between Oceania and Regent, I would be shocked if NCLH carved out a sale of Oceania without also including Regent (but it is certainly possible).

 

The board's fiduciary responsibilities not only make this possibility likely but, in fact, obligate them to at least consider offers to purchase assets made by third-parties in good faith.

 

If Azamara with its three (soon to be four) ship fleet size is viable as an acquisition target (as evidenced by the transaction with Sycamore, the private equity firm), then Oceania is arguably an even more lucrative target for a potential spin-off. If I had the cash, I would do the deal myself. Sadly, I don't. :-)

 

Taking Oceania private though a transaction of this type would have myriad benefits and drawbacks. The most obvious drawback would be the efforts to value engineer (i.e. increase prices and decrease onboard product). The benefits are more subtle: NCLH is going to have very significant financial problems for the foreseeable future, even once sailings start again. Chapter 11 is not going out of the question (as is the case for every travel operator who took on tremendous amounts of debt during the course of the Covid-19 pandemic). A transaction to take Oceania private would at least ensure their financial stability, regardless of what happens to the current parent company.

 

All of that would be addressed by an 8-K filing which, again, does not exist at the moment. Thus, until we see that, we can only speculate.

Edited March 17, 2021 by cdcummings
added content on hypothetical transaction

[tampadee]

15 minutes ago, GeorgesGal said:

I've read that Oceania will, once again, be on its own, ceasing its relationship with  NCLH at some time in the future.  Does anyone have any idea when this might occur?

 

Another question, for which I believe I know the answer, is how long if at all the stockholder benefit for owning NCLH will last after the break?

 

Number three is will Oceania be issuing its own stock, or will it be privately held?

 

Inquiring minds wants to know!

Donna

I can't find any information about Oceania leaving its relationship with NCLH.  Where did you see this?

[Jancruz]

31 minutes ago, GeorgesGal said:

I've read that Oceania will, once again, be on its own, ceasing its relationship with  NCLH at some time in the future.  Does anyone have any idea when this might occur?

 

Another question, for which I believe I know the answer, is how long if at all the stockholder benefit for owning NCLH will last after the break?

 

Number three is will Oceania be issuing its own stock, or will it be privately held?

 

Inquiring minds wants to know!

Donna

Never as long as FDR is the head of the company

Jancruz1

 

[GeorgesGal]

1 minute ago, Jancruz said:

Never as long as FDR is the head of the company

Jancruz1

 

Thanks for your knowledgeable input, Jan.  I was hoping you'd chime in!  As to where I heard this, I believe it was in an article on  a Cruise Critic thread to which someone had posted a link.  It was about a month or so ago.  Don't know which thread, though.

[LHT28]

Who ever took over would need VERY deep pockets

 

I hope Jan is right

[pinotlover]

NCLH has borrowed a heap of cash, with , I’m guessing, a ton of liens on everything they own, including Oceania ships.

 

Trying to separate and clear those liens for any sale would be difficult at best.

 

Trust what Jancruz has said.

[LHT28]

Maybe FDR will buy back Oceania  for  something to do when he retires  😃

[Tranquility Base]

....

Edited March 18, 2021 by Tranquility Base

[ORV]

I just can’t seem to come up with a reply that works here. 

[floridatravelersforlife]

If the sale generated enough Billions, then the creditors would be more than happy to renegotiate the terms of debt.    The new owners (whether Apollo or someone  else) could provide the same or better service until they resold the business some years thereafter.   

[RJB]

22 hours ago, LHT28 said:

Maybe FDR will buy back Oceania  for  something to do when he retires  😃

Would be great for Oceania.  I would love to see it and maybe Jan would also

[GeorgesGal]

1 minute ago, RJB said:

Would be great for Oceania.  I would love to see it and maybe Jan would also

Agreed, RJB!  Oceania was a better product when it didn't have to answer to a holding company which counted all the beans.  I'd love to see it as a stand-alone once more.

[RJB]

3 minutes ago, GeorgesGal said:

Agreed, RJB!  Oceania was a better product when it didn't have to answer to a holding company which counted all the beans.  I'd love to see it as a stand-alone once more.

They just need to make sure the new ships go with the deal.   Cant wait to sail on them. 

[pinotlover]

I seriously doubt a small company like PCH could have survived the cash flow hit of the pandemic alone.

 

Attempting to sell assets, at assuredly depressed prices, to a corporate insider would make a lot of money for a bunch of lawyers. The bond and shareholders would be all over that. Never happens.

 

I forget what NCL paid for all of PCH, but there was no “ B” in the number. To suggest that Oceania would Bring “ B”illions in this market  is surely the laugh of the Day! 😂

[njhorseman]

1 hour ago, GeorgesGal said:

Agreed, RJB!  Oceania was a better product when it didn't have to answer to a holding company which counted all the beans.  I'd love to see it as a stand-alone once more.

The same person who founded Oceania is the CEO of the holding company. So his decisions about Oceania were great one day and suddenly weren't so great the next day? Long before Oceania was folded into NCLH controlling interest in Oceania had been acquired by Apollo Management, which also held controlling interest in NCL at that time...and FDR has been there all along.

[njhorseman]

29 minutes ago, pinotlover said:

I seriously doubt a small company like PCH could have survived the cash flow hit of the pandemic alone.

 

Attempting to sell assets, at assuredly depressed prices, to a corporate insider would make a lot of money for a bunch of lawyers. The bond and shareholders would be all over that. Never happens.

 

I forget what NCL paid for all of PCH, but there was no “ B” in the number. To suggest that Oceania would Bring “ B”illions in this market  is surely the laugh of the Day! 😂

There was a "B". The value was stated as  $3.025 billion in cash and stock including the acquisition of debt.

[Jancruz]

On 3/17/2021 at 1:44 PM, LHT28 said:

Maybe FDR will buy back Oceania  for  something to do when he retires  😃

 

[Jancruz]

 

I've read that Oceania will, once again, be on its own, ceasing its relationship with  NCLH at some time in the future.  Does anyone have any idea when this might occur?

 

Another question, for which I believe I know the answer, is how long if at all the stockholder benefit for owning NCLH will last after the break?

 

Number three is will Oceania be issuing its own stock, or will it be privately held?

 

Inquiring minds wants to know!

Donna

 

 

Totally, unequivocally, with out question no FDR

Edited March 18, 2021 by Jancruz

[pinotlover]

Thanks Jancruz!

 

End of discussion.