Which Shares Would You Buy? – Other Cruise News: Cruise & Maritime Enters The Australian Market – Classic International Revived?
by Kevin Griffin
Within the last several months, both Facebook and Norwegian Cruise Line have launched Interital Public Offerings on the Nasdaq. We have a look at some of the differences between the two and ask which shares would you prefer to buy? Elsewhere, news broke last week that Cruise & Maritime Voyages was going to enter the Australian market, in an effort to fill the void created by the demise of Classic International Cruises. But no sooner had that been announced than the ghost of Classic International rose from the dead, with the news that its creditors Montepio Geral had sold the entire Classic International fleet, with four ships going to a Portuguese entrepreneur who intends to revive the operation, while one goes back to the sons of George Potamianos, who had founded Portugal’s cruise fleet with Classic International.
THIS WEEK’S STORY
Which Shares Would You Buy?
Two Initial Public Offering (IPO) floats on the Nasdaq in the past seven months, each valued at about $28 at the close of markets on Friday, had totally different outcomes.
First came Facebook (FB), which floated on May 18, 2012 at $38 a share. In a disorganized sale process the share price fell, and kept falling until September, when it crashed below the $20 barrier, a value thaat was half of what it floated for. Many lost money as the Facebook flotation was given the sobriquet “worst IPO in a decade,” but the share price of the $16 billion IPO has since risen to $28.55 on Friday, still a 25% discount on the original price.
The other flotation was Norwegian Cruise Line (NCLH), whose IPO launched on January 17, when it opened at $19 a share, above the initially intended range of $16-18, raising $446.5 million for the cruise line. Twenty-five days later, it had risen to $27.91 on Friday’s close, a premium of 47% on the original price. Many commentators were surprised at how well this share had done, particularly given Norwegian’e levels of debt.
Which shares would you buy and why?.It might be interesting to keep an eye on these two for the next year or so.
OTHER CRUISE NEWS
Cruise & Maritime Enters The Australian Market
Last Wednesday, Premicon AG, owners of the 600-berth 20,606-ton Astor, announced that she would be chartered to UK-based Cruise & Maritime Voyages for three winter seasons, starting in 2013-14.
She will continue to operate for Bremen-based TransOcean Cruises in the summer time. The Astor will become Cruise & Maritime’s third ship, being added to the 848-berth Marco Polo and 650-berth Discovery, which has only just joined the fleet from Voyages of Discovery.
Cruise & Maritime plan to operate the Astor in the Australian summer market, filling the void left by the demise of Classic International Cruises at the end of 2012.
It will offer a series of Australian cruises, including cruises from Fremantle, a Round Australia cruise and some Asian cruises in the winter of 2014.
Over the past several years, Classic International had been offering southbound passages from Europe to Australia in late autumn and northbound passages back from Australia to the UK each spring, first in the 430-berth Funchal, and more recently in the 556-berth Athena.
The 1987-built Astor will make an ideal modern replacement for those ships. She will depart from Europe on November 5 via South Africa, to arrive in Fremantle on December 11, while the northbound voyage to Europe will depart on April 1, also by way of South Africa. As well as adding a needed service to the South African market, this will avoid any possible contact with pirates off Somalia.
The Astor was built for the South Africa run in 1987 but when she was delivered went into destination and adventure cruising.
Cruise & Maritime Voyages have some experience of the Australian trade as its two main directors, Richard Bastow and Chris Coates, spent a good part of their early careers with CTC Cruises, who used to operate ex-UK by summer and from Australia in the winter. Cruise & Maritime had also tried to arrange a last-minute charter of the Delphin from Passat Kreutzfahrten to Classic International’s Australian arm to replace the Athena, but by then, Passat was unwilling to give up its own winter program so the charter did not go ahead. Cruise & Maritime has opened a new branch office in Sydney. It also opened a US office in Fort Lauderdale in 2011.
Classic International Revived?
Soon after the announcement of the Astor’s charter, news came from Portugal that Montepio Geral, the creditors of Classic International Cruises, which closed down in October, had sold the entire fleet on. Four of the ships have been sold to 44-year-old Portuguese entrepreneur Rui Miguel Duarte Alegre, who plans to start a new cruise line. Alegre has until now been an executive of the large Portuguese Amorim Group, most famous for being the world’s largest supplier of cork.
At Amorim, Alegre has served as chairman of the property company Amorim Imobiliaria, which among other things has hotel ventures throughout Portugal, and also as first vice-chairman of the board of Amorim Desenvolvimento, formed in 1989 to look after Amorim’s non-core holdings. He is also president of Lino Nunes Pires SA and a director of Amorim Tourism, which operates hotels and casinos including the Blue & Green Lake Spa Resort in the Algarve, which won a TripAdvisor 2013 Travellers Choice Award and re-opens for the 2013 season today.
The four ships acquired by Rui Alegre include the Athena and Funchal, the 334-berth Arion and the 560-berth Princess Danae. Further details of the new cruise operation are not yet available but it is reasonable to assume that it will try to revive the various charter relationships that Classic International was famous for in smaller European countries.
The fifth ship, Princess Daphne, a sister to the Princess Danae, has been acquired by Greek-based interests working with Alex and Emilios Potamianos, sons of the founder of the Portuguese company, George Potamianos.
The Greek family business, where George once worked, operated many cruise ships under the name Epirotiki Lines, which later became part of Royal Olympic Cruises.
It is thought that the Princess Daphne might be proposed back to Ambiente Kreutzfahrten, her charterers when she was arrested in Crete on October 3, 2012. At the time, Ambiente said that they were cutting all ties with Classic International, but whether a new Piraeus-based family organization might have more credibility will be interesting to see.
(Kevin Griffin is managing director of specialist cruise agency The Cruise People Ltd in London, England. For further information concerning cruises mentioned in this article readers can visit his blog)