News of yet another grounding, of sorts, as hit my email box this week.
Looks like the new "owners" of Miami based Norwegian Cruise Line (NCL) have perhaps gotten a case of the credit blues; seems a common problem these days in the good 'ol US of A. Aker Yards in France has issued a stop work order on NCL's first new mega ship, dubbed the F3. At 150,000GT and with a capacity of 4,200 passenger, NCL's novel "freestyle cruise" ship concept would be keeping pace with rivals Carnival and Royal Caribbean. They were due for delivery in March and October of 2010.
The stop work on the first, and already 25% completed ship was issued after a dispute arose between the companies that could not be resolved. According to internet reports the issues appear to gravitate around "design changes" on the already innovative ship; the associated changes and delays causing financial pressures on Aker Yards. The original order for 2 ships, costing about 2.2 billion US dollars, was placed by then NCL owners, Star Cruises of Singapore. The second vessel is reportedly unaffected by the dispute and continues to take shape at the French shipyard in Saint Nazaire. Although rumors is, it's on the chopping block as well; NCL and Aker Yards, reportedly, will not confirm much of the details surrounding these developments but has been shopping the first F3 to NCL rivals RCI, MSC and Carnival.
Apollo Private Equity, is a "high powered" - from my meager perspective - Wall Street type investment firm, which launched itself into the cruise business by acquiring a 50% stake in NCL from Star Cruises in 2007. That year, they also acquired Prestige Cruise Holdings, which included the Regent Seven Seas and Oceania (launched by former owners of Renaissance Cruise Line) "upper premium" cruise brands. You can have a look at their extensive holdings here.
I like this statement from Apollo's website explaining the secrets of their success, "traditional buyout investing with a “distressed option” has proven highly successful". You gotta love the 1990's "greed is good " attitude, it kinda brings into perspective the reason why we are in the financial mess we are in today.
You can read about Apollo's founder, Leon Black here, and his father here (he's another "successful" investment bankster, huh, banker). Readingeagle.com summarizes Mr. Black in one paragraph; "Black made his name at Drexel Burnham Lambert Inc., where he helped the investment-banking firm popularize the use of junk bonds, the high-risk, high-return securities that fueled the 1980s leveraged-buyout boom. After Drexel fell apart in the wake of insider-trading charges that left Black unscathed, he founded Apollo."
I guess you can probably guess that I dont have much respect for vultures. I am sure it would be different if it was my personal money, but lets face it, shipping and its many shortfalls are probably links to this type of predators, sadly and intrinsically weaved into the fabric of commercial ship life.
I guess its kinda true about what I read in some popular cruise websites; seems like NCL hasn't been able to catch a break in the business, which has seen fellow Carnival and RCI do pretty good.
Labels: business, cruise ships, NCL, RCI, shipyard