Star Cruises shares rose 8.7 per cent yesterday after Asia's biggest cruise line said it would sell US$150 million in convertible bonds to pay down debt. Separately, the firm said after the market closed that its 50 per cent-owned United States unit, NCL Corp, swung to a profit in the first half on cost-cutting and lower fuel prices. The cruise line controlled by Lim Kok Thay, the head of Malaysian casino operator Genting Group, said it would sell seven-year bonds that pay a 7.5 per cent interest annually and are convertible into equity representing 13.85 per cent of the company's current share capital. The conversion price for the bonds was set at HK$1.13 per share, a 29.3 discount to the stock's closing price yesterday. Star Cruises, which has not reported a net profit since 2005 and had US$466.96 million in long-term debt as of the end of last year, said it would use proceeds from the bond sale to fund general working capital and pay down debt. Meanwhile, Star Cruises said NCL, which it owns jointly with private equity firm Apollo Management, swung to a net profit of US$20.61 million in the first six months from a loss of US$172 million a year earlier. The improvement came despite a 12.9 per cent drop in revenue that was more than offset by significantly lower fuel prices and aggressive cost-cutting and payroll reductions. The turnaround at NCL may bode well for Star Cruises' first-half results, set to be announced on August 28. The Asian parent firm operates five ships in Asia while the NCL unit operates 11 vessels, mainly in North America. Star Cruises booked a net loss of US$79.51 million last year, driven by a US$104.1 million loss on its share of NCL's results. The firm is building a US$1.55 billion casino resort complex at Manila Bay in the Philippines in a joint venture with local property developer Alliance Global. The resort is set to open in phases with this month's soft launch of a 342-room Marriott Hotel. Shares in Star Cruises closed 12 HK cents higher at HK$1.50 after the bond sale announcement.