Thursday, May 18, 2000
First Choice is one of the U.K.'s largest
tour operators. It serves over 4 million customers annually in
the U.K. and Canada. Its brands include First Choice, Unijet,
Hayes & Jarvis, Suncars, Sovereign and Sunsail. It has a
charter airline with 25 aircraft operated under the name Air
2000, a seat broker, Viking International, as well as the world's
largest yacht holiday rental company.
Royal Caribbean is buying a new issue of
First Choice convertible preferred stock for approximately $300
million The includes a conversion option that, if fully utilized,
would give Royal Caribbean about a 20% interest in First Choice.
The issuance of the convertible preferred stock will allow First
Choice to accelerate its growth opportunities in the rapidly
Royal Caribbean expects to see a quick impact to its European passenger sourcing. First Choice will provide both Royal Caribbean and its Celebrity Cruises brand with a significantly larger distribution base in the U.K. Independently, Royal Caribbean and First Choice will launch a new cruise brand targeting the mass-market European vacationer through a joint venture. Viking Serenade, a 1,500-passenger ship currently operated under the Royal Caribbean International brand, will be the first ship operated by the new cruise line, which has yet to be named. As part of the transaction, Viking Serenade will be renamed and offer itineraries out of the Mediterranean in summer and out of the Caribbean in winter. Operations will begin in the spring of 2001. Viking Serenade will be transferred to the new company on completion of the strategic alliance at an agreed valuation of approximately $100 million. Royal Caribbean and First Choice will each subscribe approximately $50 million for 50% of the joint venture.