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| Photo by Freeimages.com/Mike Johnson |
Royal Caribbean Cruises Ltd. (RCL) and Madrid-based private equity firm Springwater Capital have announced an agreement to form a joint venture regarding the management of the Pullmantur and Croisières de France (CDF) cruise brands.
As part of the terms of the agreement, RCL will sell a 51 percent stake in Pullmantur and CDF to Springwater. RCL will have a 49 percent stake, and will retain full ownership of the ships and planes currently operated by Pullmantur and CDF, which will be leased into the joint venture. RCL will also provide marine operations services to Pullmantur and CDF through a management agreement.
This joint venture expands on the pre-existing partnership between RCL and Springwater for the Wamos air transport, travel agency, and tour operation businesses. This investment also expands Springwater's existing tourism portfolio, which includes airline and travel agency investments in Spain, France and Portugal.
The joint venture is expected to be completed later this year, subject to customary closing conditions and regulatory approvals. It is expected to result in an immaterial one-time gain, which will be excluded from RCL's key metrics. Given the markets in which Pullmantur operates, the transaction is expected to have partially offsetting impacts on yields and expenses. The amount of these impacts will depend on when regulatory approvals are received and the transaction closes, but the net effect on the company's 2016 bottom line is expected to be neutral to marginally positive.
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