Norwegian Cruise Line Holdings

Norwegian Cruise Line Holdings (NCLH) is a holding company that is domiciled in Bermuda and based in the United States.[2][3] It operates three cruise lines as wholly owned subsidiaries: Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises. With its subsidiaries combined, it is the third-largest cruise operator in the world. It is a publicly traded company listed on the New York Stock Exchange. It has never had any connection with Norway, although its subsidiary Norwegian Cruise Line did, at its inception.

Norwegian Cruise Line Holdings Ltd.
TypePublic
IndustryTourism
FoundedFebruary 21, 2011 (2011-02-21)
HeadquartersBermuda (domicile)
Miami, Florida, United States (operations)
Area served
Worldwide
Key people
Frank del Rio
(CEO)
ProductsCruises
Number of employees
33,200 (2019)
Subsidiaries
Websitewww.nclhltd.com
Footnotes / references
[1]

History

NCLH was incorporated on February 21, 2011 as a Bermuda exempted company[1] in anticipation of a planned initial public offering (IPO).[4] At the time, Norwegian Cruise Line was owned by a consortium of Genting Hong Kong, Apollo Management and TPG Capital.[4] Following the completion of the IPO in January 2013 and its debut on the NASDAQ,[5][6] Norwegian Cruise Line and NCLH underwent a corporate reorganisation that gave NCLH full ownership of Norwegian Cruise Line,[7] while Norwegian Cruise Line's previous owners exchanged their stakes for shares in NCLH.[7]

Immediately after the initial public offering, public shareholders controlled 13.3% of NCLH, while Genting Hong Kong owned a 43.4% stake, Apollo 32.5%, and TPG 10.8%.[7] In the following years, those three sponsors progressively reduced their stakes through a series of secondary public offerings.[3] By the end of 2014, nearly half of NCLH's shares were publicly owned, with Genting, Apollo and TPG controlling 25%, 24% and 7%, respectively.[8] One year later, combined ownership among the three firms had been cut nearly in half, with Apollo now holding the largest individual stake (15.8%), followed by Genting (11.1%) and TPG (2.4%).[9][10] Eventually, on 3 December 2018, Apollo and Genting sold off their remaining stakes in the company, marking the end of a relationship that lasted more than a decade.[11]

In September 2014, NCLH announced that it had purchased Prestige Cruise Holdings, the parent company of Oceania Cruises and Regent Seven Seas Cruises in cash and stock for a total transaction consideration of $3.025 billion, including the assumption of debt.[12][13]

On 9 January 2015, Kevin Sheehan, President and CEO, was succeeded by Frank Del Rio, co-founder of Oceania Cruises.[14]

On 14 December 2015, NCLH was added to the NASDAQ-100 index.[15] However, it later switched its listing from NASDAQ to the New York Stock Exchange on 19 December 2017,[16] and it was removed from the index.[17]

In June 2018, NCLH's Chairman Walter Revell stepped down,[18] and was replaced by Miami Beach developer Russell Galbut.[19]

As of 2018, it is the third-largest cruise operator in the world, collectively controlling 9.5% of the cruise market by passengers and 12.6% by revenue across its three subsidiaries.[20]

2019-2020 Covid-19 pandemic

On March 14, 2020, the U.S. Centers for Disease Control and Prevention issued a No Sail Order for cruise ships. Concurrently Norwegian Cruise Line Holdings implemented a suspension of all cruise voyages across its three brands, with all 28 ships in port or at anchor and all passengers disembarked by March 28, 2020. This suspension has subsequently been extended through June 30, 2020.[21]:S-1

On May 5, 2020, in a filing with the U.S. Securities and Exchange Commission, Norwegian Cruise Line Holdings said there is “substantial doubt” about its ability to continue as a “going concern” as it faces a liquidity crunch over the next twelve months.[21]:S-6

Remarkably, by the next day, NCLH was able to secure over $2.2 billion of additional liquidity in oversubscribed capital markets transactions, but at a price: (1) $400 million in common stock at $11 per share; (2) $675 million in senior secured notes due 2024 at a 12.25% interest rate; (3) $750 million in exchangeable notes due 2024 at 6% interest rate, and exchangeable at any time into common shares at $13.75; and (4) $400 million private investment from a global private equity firm.[22][23] On May 7, 2020, NCLH CEO declared that the company has secured enough liquidity to get through potentially 18 months of zero revenues and may resume cruising later in 2020.[24][25]

Although revenue plummeted 99% year to date, and with a net loss of $715 million in the second quarter,[26] not to mention cruises canceled until at least November,[27] CEO Frank Del Rio commented that he expects relaunch to take 6+ months once cruising fully begins again.[28]

The "no-sail" order from the CDC has been extended through December 31, 2020.[29]

Subsidiaries

NCLH fully owns three subsidiary cruise lines or brands:

References
  1. Citigroup (March 4, 2014). Norwegian Cruise Line Holdings Ltd: Prospectus Supplement. SEC.gov (Report). p. 9. Retrieved November 14, 2019. NCLH was incorporated on February 21, 2011 as a Bermuda exempted company...
  2. "Norwegian Cruise Line Holdings Ltd. - Quarterly Report". ncl.com. Retrieved May 11, 2016.
  3. 2017 Annual Report (Report). Norwegian Cruise Line Holdings Ltd. Retrieved January 1, 2019.
  4. Annual Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934 for the Fiscal Year Ended December 31, 2011 (PDF) (Report). NCL Corporation Ltd. February 22, 2012. Retrieved November 14, 2019. Our shareholders created a holding company ('Norwegian Cruise Line Holdings Ltd.') which filed a registration statement on Form S-1 (amended) with the Securities and Exchange Commission ('SEC') in October 2011 in connection with the proposed initial public offering of its ordinary shares (the 'IPO').
  5. "Company History". nclhltdmedia.com. Norwegian Cruise Line Holdings. Retrieved December 31, 2018.
  6. "Norwegian Cruise Line IPO soars 31%". USA Today. January 17, 2013. Retrieved May 11, 2016.
  7. FORM 10-K (Annual Report) (PDF) (Report). Norwegian Cruise Line Holdings Ltd. February 20, 2013. Retrieved January 1, 2019.
  8. 2014 Annual Report (PDF) (Report). Norwegian Cruise Line Holdings Ltd. February 27, 2015. p. F-15. Retrieved November 14, 2019. As of December 31, 2014, the ownership percentages of NCLH’s ordinary shares were as follows: Genting HK (1)... 25.0%, Apollo Funds (2)... 24.0%, TPG Viking Funds (3)... 7.0%
  9. 2015 Annual Report (PDF) (Report). Norwegian Cruise Line Holdings Ltd. February 29, 2016. p. 35. Retrieved November 14, 2019. As of December 31, 2015, the approximate relative ownership percentages of NCLH’s ordinary shares were as follows: the Apollo Holders (15.8%), Genting HK (11.1%), the TPG Viking Funds (2.4%), and public shareholders (70.7%).
  10. "t1700166-def14a - none - 7.8927892s". www.sec.gov.
  11. Stieghorst, Tom (December 3, 2018). "Apollo and Star cash out of Norwegian Cruise Line: Travel Weekly". Travel Weekly. Retrieved January 1, 2019.
  12. "Norwegian Cruise Line Purchases Prestige Cruise Holdings". cruiseindustrynews.com. Retrieved May 11, 2016.
  13. Reuters Editorial (September 2, 2014). "UPDATE 1-Norwegian Cruise Line to buy Prestige Cruises from Apollo". Reuters. Retrieved May 11, 2016.
  14. "New chief at Norwegian helm". miamiherald. Retrieved March 9, 2017.
  15. "Norwegian Cruise Line Holdings will become member of NASDAQ-100". informare.it. December 14, 2015. Retrieved December 31, 2018.
  16. "Norwegian Cruise Line Holdings leaving Nasdaq for NYSE". December 8, 2017.
  17. "Annual Changes to the NASDAQ-100 Index". December 8, 2017. Retrieved January 2, 2019.
  18. Kalosh, Anne (April 27, 2018). "Longtime Norwegian Cruise Line Holdings chairman will step down". seatrade-cruise.com. Retrieved January 1, 2019.
  19. Bandell, Brian (June 21, 2018). "Norwegian Cruise Line names Miami Beach developer chairman". South Florida Business Journal. Retrieved June 22, 2018.
  20. "2018 Worldwide Cruise Line Market Share". Cruise Market Watch. 2018. Retrieved December 31, 2018.
  21. Norwegian Cruise Line Holdings Ltd. "Preliminary prospectus supplement: $350,000,000 ordinary shares". nclhltdinvestor.com: SEC filings. p. see page S-6. Retrieved May 5, 2020. The factors described above, in particular the suspension of cruise voyages and decline in advanced bookings, as well as debt maturities and other obligations over the next year, have raised substantial doubt about the Company’s ability to continue as a going concern, as the Company does not have sufficient liquidity to meet its obligations over the next twelve months, assuming no additional financing or other proactive measures.
  22. "Norwegian Cruise Line Holdings Ltd. successfully secures over $2 billion of additional liquidity in oversubscribed capital markets transactions". market watch. May 6, 2020. Retrieved May 6, 2020.
  23. Duberstein, Billy (May 6, 2020). "Norwegian Cruise Line bites the bullet and raises more money: Why that's good and bad". motley fool. Retrieved May 6, 2020.
  24. Helen Coster, Joshua Franklin (May 7, 2020). "Norwegian Cruise Line has enough cash for 18 months of no revenue - CEO". reuters.com. Retrieved May 7, 2020.
  25. Clifford, Tyler (May 7, 2020). "Norwegian Cruise Line CEO: 'We expect to sail sometime in 2020'". cnbc.com. Retrieved May 7, 2020.
  26. Klebnikov, Sergei. "Norwegian Cruise Line CEO 'Astonished' People Are Still Booking Cruises". Forbes. Retrieved August 10, 2020.
  27. Reimann, Nicholas. "Most Cruises Are Now Canceled Until At Least November". Forbes. Retrieved August 10, 2020.
  28. Hines, Morgan. "Norwegian CEO: Relaunch will take six months; fleet will 'return in earnest' in spring 2021". USA TODAY. Retrieved August 10, 2020.
  29. "Coronavirus Disease 2019". Centers for Disease Control and Prevention. July 17, 2020. Retrieved August 10, 2020.
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