GHK may further reduce stake in cruise operator

Analyst: It maywant to crystalise investments

Analysts are not ruling out the possibility of Genting Hong Kong Ltd (GHK) and Apollo Global Management LLC – two majority shareholders of Norwegian Cruise Line Holdings Ltd – further reducing their stakes in the Miamibased cruise company.

This was after GHK, also a passenger cruise ship operator, and other shareholders proposed to sell 23 million shares in Norwegian Cruise Line, as reported by Reuters yesterday.

As part of the sale, GHK will sell up to 11.5 million shares, reducing its stake in Norwegian Cruise Line to as low as 37.7%.

The analyst said GHK, formerly known as Star Cruises Ltd, might want to crystalise a portion of its investment initially made about 13 years ago.

“GHK had invested US$1bil (RM3.25bil) in Norwegian Cruise Line back in 2000 and the company is worth over US$6bil,” he said.

Shareholders of Land & General Bhd (L&G) have approved the company’s rights issue of five year irredeemable convertible unsecured loan stocks (ICULS) and the proposed acquisition of a freehold 13-storey office block in Putrajaya.

At its EGM here yesterday, shareholders

Norwegian Cruise Line’s initial public offering in January had raised US$447mil, with the company reportedly using the proceeds to reduce borrowings.

Norwegian Cruise Line sold 23.5 voted 80.77 to 19.23% in favour of the proposed ICULS while they voted 80.85 to 19.42% for the acquisition resolution.

The 1% ICULS is at 100% of the nominal value of 13 sen each on the basis of 13 sen nominal value of the iculs for every one existing share held on an entitlement date to be million shares, or a 12% stake, for US$19 each, above the marketed range.

Another analyst familiar with the matter revealed that GHK might want to further pare down its stake in Norwegian Cruise Line, which mainly operates in US waters and did not have a strong synergistic business value with GHK’s resorts business.

GHK, an 18.4% unit of Genting Malaysia Bhd, started physical works on phase one of its US$1.1bil Resorts World Bayshore in Manila late last year, a project that is set to be three determined later.

“I am pleased to inform that the EGM went on smoothly and the majority of shareholders voted for the resolutions,” said L&G managing director Low Gay Teck yesterday.

The RM72.49mil acquisition approved by L&G shareholders times the size of the existing Resorts World Manila.

Resorts World Bayshore is GHK’s second venture after the existing Resorts World Manila.

When completed, Resorts World Bayshore will hold two upscale hotels with 800 rooms, a grand opera that seats 3,000, a mall and residential towers centred around a casino that is two times larger than Resorts World Manila’s.

Both integrated resorts are 20 minutes apart. GHK had invested US$800mil in Resorts World Manila. involves a building situated on freehold land in Precinct 3 Putrajaya with a gross floor area of 180,984 sq ft.

It was acquired via its whollyowned subsidiary Maple Domain Sdn Bhd from Mayland Avenue Sdn Bhd, a wholly-owned subsidiary of Malaysia Land Properties Sdn Bhd.

Piling specialist Pintaras Jaya Bhd is expected to ride on the expanding demand for piling jobs in Malaysia, with certain megaprojects going into full swing in the next few years, said RHB Research Institute.

Demand in the next one year is expected to come from projects such as the RM383bil Iskandar Malaysia project, the RM60bil Refinery and Petrochemicals Integrated Development project in Pengerang, Johor, the RM26bil Tun Razak Exchange and the RM7bil West Coast Expressway.

Projects that will come onstream and that will need piling after the coming year are the Line 2 or Sg Buloh-Serdang-Putrajaya Line of the Klang ValleyMRTproject, theGemasJohor Baru double-tracking project, Bandar Malaysia, Kwasa Damansara and the Warisan Merdeka Tower.

RHB said in a report that Pintaras could ride on this demand, as it had previously completed piling works for projects such as the Customs, Immigration and Quarantine complex; JB Sentral; certain property residential projects in Mont’ Kiara and the Guthrie Corridor Expressway.

RHB expects Pintaras’ net profit growth to grow at a compounded annual growth rate of 18.7% from FY12-FY15 compared with 10.5% in FY12.