Bonheur has bought two older cruiseships from Carnival Corp for its subsidiary Fred Olsen Cruise Lines at a total cost of around $37m with the help of cheap finance from the distressed cruise major as it seeks to urgently offload assets.
The Norwegian holding company for the Fred Olsen group has entered into agreements with Carnival's HAL Nederland to acquire the 1,380-berth Amsterdam (built 2000) and 1,404-berth Rotterdam (built 1997), according to TradeWinds analysis of Clarksons Research and Holland America Line data.
The vessels will be renamed MS Bolette and MS Borealis, respectively.
"This acquisition forms part of an optimisation of the Fred Olsen Cruise Lines' fleet composition and with a high yielding cabin mix and large public spaces, these vessels will enhance Fred Olsen Cruise Lines' earnings capabilities once operations can safely resume," Bonheur said in a statement.
Delivery is expected to take place in the UK in September of this year.
Carnival announced plans to sell 13 ships, including two Holland America Line vessels, although brokers initially identified a different pair.
Bonheur has agreed to give £7m ($8.8m) in financing to Fred Olsen, while New York-listed Carnival will offer a seller's credit to Bonheur of £22.3m ($28m) to cover rebranding, lay-up, pre-operational and start-up costs.
The credit will have a five-year tenor with three years of zero amortisation and annual instalments of £7.43m ($9.35m) at 2.5% fixed interest.
That contrasts with the interest rate of over 10% Carnival agreed to pay on two bond issues totalling $1.26bn that were priced earlier on Wednesday.
In a recent note to clients, law firm Stephenson Harwood anticipated the return of seller's credit in both secondhand deals and newbuilding transactions.
"With ever-increasing financial pressures on owners in recent months, seller's credit is likely to become an essential part of more and more ship finance transactions," wrote the firm's Jonathan Ward and David Metzger.
Still undecided on return date
Fred Olsen Cruise Lines will base its decision to start sailing again on guidelines from authorities such as the UK government and Public Health England as well as overseas policies.
"A decision on safely resuming cruising will correspondingly be taken in close harmonisation with such institutions," said Bonheur in a statement to the Oslo stock exchange on Wednesday evening.
"By optimizing its fleet and operations, Fred Olsen Cruise Lines is positioning itself to emerge from the current cruise pause in a stronger and more resilient position."
Fred Olsen Cruise Lines on Wednesday announced moving four idle cruiseships into lay-up to reduce costs while working on a date to resume operations.
The company first anchored them in Scotland's Firth of Forth in March amid Covid-19 lockdowns but moved them in late May to Babcock’s naval dockyard in Rosyth on the firth to prepare for lay-up.
The four ships are the 880-berth Boudicca (built 1973), 804-berth Black Watch (built 1972), 1,350-berth Balmoral (built 1988) and 824-berth Braemar (built 1993), according to Clarksons.
Fred Olsen Cruise Lines has 3,958 berths on the ships currently out of service but will increase its overall capacity by 70% by acquiring the two Holland America Line vessels.
Earlier on Wednesday, Bonheur posted a second-quarter net loss of NOK 632m versus a NOK 11m deficit last year. Its cruise segment saw an Ebitda loss of NOK 172m, down from positive Ebitda of NOK 137m in the same period of 2019.
Bonheur is also the majority shareholder in TradeWinds parent NHST Media Group.
