Genting Hong Kong is to sell up to 35% of Dream Cruises to TPG Capital Asia, TPG Growth and Ontario Teachers’Pension Plan.
The sale will strengthen Genting Hong Kong as it completes two ‘Global Class’ ships for Dream Cruises, the first of which will be delivered in early 2021 and the second in early 2022, the company said.
The consideration for the 35% equity interest is $489 mill, valuing Dream Cruises total equity at $1,397 mill. With assumption of net debt of $1,871 mill, the enterprise value of the transaction is $3,268 mill.
The transaction will result in a gain of around $470 mill, which will increase the net asset value of each GHK shares by S5.5 cents or HK$43 cents. The purchase will be made in two tranches, with the first guaranteed tranche of at least 24.5% for $342 mill expected in September, and a second tranche of up to 35% in total expected by December, 2019.
Additional incentive payments will be paid on achievement of certain profitability level of Dream Cruises and delivery of each of the ‘Global Class’ ships.
“Dream Cruises is the premium brand for the fast growing Asian-sourced cruise passenger, with the vision that they will be able to cruise globally in all regions of the world with Dream Cruises,” said Tan Sri KT Lim, GHK Chairman and CEO. “The investment by TPG and Ontario Teachers’ will help Dream Cruises to have the youngest and technologically most advanced fleet of quality German built cruise ships with legendary Asian service. And we are delighted to partner again with TPG as we did on Norwegian Cruise Line Holdings Ltd in 2008,”
“Dream Cruises is an iconic and innovative brand with a strong product offering that is well positioned in an attractive industry, which will benefit directly from rising Asian wealth and outbound tourism.” said Ganen Sarvananthan, Co-Managing Partner of TPG Capital Asia.
“TPG Capital Asia and TPG Growth are delighted to partner again with Genting HK and Ontario Teachers’ in developing an Asian cruise brand, leveraging the years of experience that Genting HK has had in this sector. We look forward to contributing in our own way to this partnership.”
“The investment is a testament of Ontario Teachers’ positive view on longer term growth in Asia and is part of our continued drive to expand our global footprint by strengthening our local presence in Asia. It is an excellent example of our commitment to work alongside quality partners that are highly experienced in investing and operating in the region.” added Ben Chan, Regional Managing Director, Asia/Pacific at Ontario Teachers’.
The investment is expected to close later this year, subject to customary closing conditions and regulatory approvals.