Royal Caribbean says it sold its luxury brand Azamara in part to focus on its Celebrity Cruises brand, among others. Here, Celebrity Silhouette is seen docked in Miami on a recent day.
Daniel Slim / AFP via Getty Images
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Royal Caribbean Group
is selling its three-ship Azamara brand to a private equity firm for about $ 200 million.
In a press release on Tuesday,
Royal Caribbean
The Group (ticker: RCL) said the deal allows it to focus on expanding its Royal Caribbean International, Celebrity Cruises and Silversea brands.
The stock was around $ 74 and fluctuated around noon on Tuesday, rising more than 1% in the day’s trades and ahead of the S&P 500 gain of around 0.6%.
JPMorgan analyst Brandt Montour described Azamara in a research note on Tuesday as “a sophisticated brand focusing on more exotic / engaging itineraries”. He also noted that the transaction makes sense “given [that] the Azamara fleet is likely to burn money in the foreseeable future, and we think RCL saw this as a secondary brand, with no serious plans to grow it significantly in the foreseeable future. ”
Royal Caribbean will record a one-time non-monetary devaluation expense of $ 170 million, although it added that it does not expect the sale to “have a material impact” on future financial results.
Royal Caribbean was closed for almost a year due to the pandemic.
While their ships are at a standstill, Royal and her colleagues spend hundreds of millions of money every month. They raised billions of dollars in capital to survive, but they also focused on cutting costs.
For example,
Carnival (CCL),
the largest cruise company, said last week that it is removing 19 ships from its fleet.
Of the three major cruise operators based in the United States, Royal is the second largest, followed by
Norwegian Cruise Line Holdings
(NCLH).
Separately, Norwegian said on Tuesday that it extended the suspension of all its cruises with departure dates until April 30.
Write to Lawrence C. Strauss at [email protected]