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Royal Caribbean claims to have sold its luxury brand Azamara in part to focus on its Celebrity Cruises brand, among others. Here, the Celebrity Silhouette is seen docked in Miami on a recent day.
Daniel Slim / AFP via Getty Images
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Royal Caribbean Group
sells its three-ship Azamara brand to a private equity firm for around $ 200 million.
In a press release on Tuesday,
Royal Caribbean
Group (Symbol: RCL) said the deal allows it to focus on expanding its brands Royal Caribbean International, Celebrity Cruises and Silversea.
The stock was around $ 74 and changes around noon Tuesday, up more than 1% on the trading day and ahead of the S&P 500 gain of around 0.6%.
JPMorgan analyst Brandt Montour described Azamara in a research note Tuesday as “an upscale brand focused on more exotic / immersive routes.” He also observed that the transaction made sense “given [that] the Azamara fleet is likely to burn cash for the foreseeable future, and we believe RCL viewed it as a secondary brand with no serious plans to develop it significantly in the foreseeable future.
Royal Caribbean will record a one-time non-cash impairment charge of $ 170 million, while adding that it does not expect the sale to “have a significant impact” on future financial results.
Royal Caribbean has been virtually shut down for almost a year due to the pandemic.
While their ships sit idle, Royal and his peers have burned hundreds of millions of dollars every month. They raised billions of dollars in capital to catch up with them, but they also focused on cutting costs.
For example,
Carnival (CCL),
the largest cruise line, said last week it was withdrawing 19 ships from its fleet.
Among the three major US-based cruise operators, Royal is the second largest, followed by
Norwegian Cruise Line Holdings
(NCLH).
Separately, Norwegian said on Tuesday it had extended its suspension from all cruises with boarding dates until April 30.
Write to Lawrence C. Strauss at [email protected]
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