Royal Caribbean says it has partially sold its luxury brand Azamara to focus on its Celebrity Cruises brand, among other things. Celebrity Silhouette was recently seen in Miami here.
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Royal Caribbean Group
sells its Azamara brand with three ships for approximately $ 200 million to a private equity firm.
In a press release Tuesday,
Royal Caribbean
Group (ticker: RCL) said the deal allows it to focus on expanding the Royal Caribbean International, Celebrity Cruises and Silversea brands.
The stock was around $ 74 and changed around noon on Tuesday, up more than 1% from day trading and ahead of the S&P 500’s gains of about 0.6%.
JPMorgan analyst Brandt Montour described Azamara in a research note on Tuesday as “a higher-end brand targeting more exotic / immersive itineraries.” He also noted that the transaction is logical “given [that] Azamara’s fleet is likely to burn money in the near future, and we think RCL considered this a non-core brand with no serious plans to grow it meaningfully in the near future. ”
Royal Caribbean will record a one-time non-cash impairment loss of $ 170 million, although it does not expect the sale to have “a material impact” on future financial results.
Royal Caribbean has been largely closed for almost a year due to the pandemic.
While their ships are idle, Royal and his colleagues have burned hundreds of millions of cash every month. They’ve raised billions of dollars in capital to help them, but they’ve also focused on cost savings.
For example,
Carnival (CCL),
the largest cruise line, said last week that it is withdrawing 19 ships from its fleet.
Of the three major cruise lines in the US, Royal is the second largest, followed by
Norwegian Cruise Line Holdings
(NCLH).
Separately, Norwegian said on Tuesday it has extended its suspension of all its cruises with embarkation dates through April 30.
Write to Lawrence C. Strauss at [email protected]