UK cruise line Virgin Voyages has tapped private equity to raise $550m in fresh capital to expand into new international markets.
US-listed private equity firm Ares Management led the latest funding round with participation from existing investors, including British conglomerate Virgin Group and venture capital firm Bain Capital.
“The new funding raise will enable Virgin Voyages to strengthen its financial position while supporting the brand’s rapid expansion into international markets,” the cruise company said.
Launched at the end of 2021, Virgin Voyages operates three ships servicing the Caribbean and the Mediterranean. It plans to operate in Australia and New Zealand by the end of the year.
“With this new investment alongside our partners at Virgin Group and Bain Capital, we believe the company is on strong footing to capitalise on its differentiated product and value proposition in the growing cruise industry,” said Aaron Rosen, partner and co-portfolio manager of special opportunities in the Ares Private Equity Group.
“We believe that Virgin Voyages continues to be at the forefront of industry growth, and we look forward to working with Tom, Nirmal and the entire management team on this next chapter,” added Jordan Smith, partner in the Ares Private Equity Group.
“The success of this capital raise shows how much Virgin Voyages has achieved and how much further it can go,” said Virgin Group CEO Josh Bayliss.
“We are very proud of the experience that Virgin Voyages has created and continues to deliver every day across its fleet.”
Separately, Virgin Voyages announced that chief executive Tom McAlpin will step down from the role and become chairman of the board.
Nirmal Saverimuttu, who currently serves as president and chief experience officer, has been appointed the new CEO.
“While I will miss the day-to-day, I believe it is the right time to step aside as CEO. Nirmal is a great friend and experienced leader who lives and breathes the Virgin Voyages culture,” said McAlpin.
“I know he will help take this amazing brand and crew to new heights, and I look forward to continuing to support the leadership team as chairman.”
Saverimuttu was a founding leader of Virgin Voyages and joined the business as chief commercial officer in 2014 from the Virgin Group after closing the first investment round. In early 2021, he took on the expanded role of president and chief experience officer.
Virgin Voyages has also announced that the delivery of the fourth ship in its fleet — the 110,000-gt Brilliant Lady — would be delayed.
“Despite careful planning, Virgin Voyages is facing unexpected construction, supply chain and staffing challenges that have delayed the introduction into service of its new ship Brilliant Lady,” the shipowner said.
It said it had made the “tough decision” to postpone the Brilliant Lady’s launch and was “evaluating new possible launch dates”. The ship is on order at Fincantieri in Italy.
