MIAMI (AP) – Apollo Management LP has agreed to make a $1 billion cash equity investment in the parent company of Norwegian Cruise Line, making the private equity group a 50 percent owner of the cruise operator.
The proposed investment, announced Friday, will be in the form of common stock alongside NCL Corporation Ltd.'s sole shareholder, Star Cruises. Under the deal, Apollo will name a majority of the NCL board with certain consent rights retained by Star Cruises, which will keep 50 percent ownership and all of its existing stock in NCL.
NCL said the move is designed to strengthen its ability to expand as it competes with rivals Carnival Corp. and Royal Caribbean International.
Apollo already made a foray into the cruise industry this year, investing in premium cruise line Oceania Cruises.
“To have an investment on this scale by one of the very top names in the private equity world is a huge vote of confidence in the new NCL we have created since Star Cruises became the owner in 2000,” said Colin Veitch, NCL president and chief executive.
The investment will be used to pay down debt and allow the cruise line to fund its shipbuilding program. NCL has introduced eight new ships in six years and will add another ship, the Norwegian Gem, in October.
The transaction, subject to approval from regulators, is expected to be completed in the fourth quarter of this year.
Star Cruises operates a combined fleet of 21 ships as the world's third largest cruise operator. NCL has 14 ships in service and under construction.