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Cruising: New Ships and New Thinking

Now there are signs that new players are eyeing the market.

One is Trondheim, Norway, entrepreneur Olav Norum. He is putting together a venture called Project Vision Quest that intends to target the U.S. market for conferences at sea with three 273 m long, 70,000 gt , 1,200 passenger ships developed in cooperation with Aker Finnyards Technology. The price tag of each ship would be around Euros 390 million (about $510 million). Plans are for the first ship to be delivered in 2007.

Facilities aboard each ship would include conference seating for 1,300 people, with some 3,500 square meter of convertible exhibition/conference space.

So if Norum builds these ships, will people come? Vision Quest only needs to capture a tiny percentage of the U.S. conference market in order to fill the ships. In the past the issue of U.S. tax deductibility of conference expenses aboard foreign ships has been one argument used in favor of building U.S.-flag cruise ships. Norum says he is aware of the issue, but that the much lower cost of staging an event on board an internationally flagged vessel would more than offset the tax savings in question.
  • Blogs

Tidewater to raise $425 million in private note placement

Closings are contemplated October 15, 2010 and December 30, 2010, when the company expects to issue a multiple series of notes totaling $310 million and $115 million, respectively. The notes will have maturities ranging from 5 years to 12 years and have a weighted average life to maturity of approximately 9 years. The notes may be retired before their respective scheduled maturity dates subject only to a make-whole provision. The weighted average coupon on the notes is 4.25 percent.

Dean Taylor, Tidewater’s Chief Executive Officer, noted “Tidewater’s ability to access the credit and capital markets on very favorable terms reflects the company’s strong financial position. In recent quarters, the company’s focus has shifted from fleet renewal and earnings replacement to longer-term growth initiatives. Competitive financing arrangements allow us to opportunistically acquire and/or build vessels that address changing customer requirements and to best position our company for a future market recovery.”

Proceeds from the note sales will be used to refinance borrowings under Tidewater’s $450 million revolving credit facility, which remains available until May 2012, to fund capital expenditures related to the Company’s on-going fleet enhancement program and for general corporate purposes.

The notes will be sold in a private placement to purchasers that are accredited investors and are restricted securities that may not be resold by such purchasers except pursuant to an exemption from registration under the federal securities laws.