Star Cruises charts 40pc capacity increase

PUBLISHED : Monday, 20 August, 2007, 12:00am
UPDATED : Monday, 20 August, 2007, 12:00am

Star Cruises, the biggest cruise line operator in Asia, plans to expand passenger capacity by more than 40 per cent in the region by 2010 with a focus on Greater China, after selling half of its stake in the North America unit, according to a senior executive.

President David Chua Ming Huat said the group would boost capacity from 7,200 lower berths to 10,400 lower berths over the next three years.

Last Friday, the company announced plans to sell 50 per cent of its wholly owned NCL Corp, which offer trips to Alaska and elsewhere in the United States and Europe, to US private equity fund Apollo Management for US$1 billion.

After the sale, Star Cruises still holds a 50 per cent stake in NCL, which carries a US$2.4 billion debt. Mr Chua said NCL's debt would be cut to about US$1.4 billion.

By cutting its financial burden in NCL, Star Cruises would be able to refocus on the fast-growing Asia-Pacific market.

'The combined strength of Apollo and Star Cruises will put the group in a much better position financially and operationally in the very competitive global cruise industry,' he said.

Star Cruises' asset sale came a week after the government announced the proposed new cruise terminal at Kai Tak will be opened for bidding as early as October. The company had earlier expressed interest in the project.

Property consultants estimated the new cruise terminal, which includes a 22,000 square metre landscaped deck atop a 50,000 square metre commercial area, would cost about HK$8 billion.

Mr Chua declined to indicate if the group would bid for the new terminal, adding that the sale of the NCL stake was not related to the tender.

Star Cruises' Greater China focus was also reflected by Mr Chua's decision to move senior management to Hong Kong from Singapore and Malaysia.

Blondel So, chief financial officer, said there was no timetable to redeploy SuperStar Libra, SuperStar Virgo, Norwegian Dream and Norwegian Majesty to Hong Kong.