Royal Caribbean buys former Crystal Endeavor for $275 million

Royal Caribbean tweeted this picture of the Silver Endeavour.

Royal Caribbean Group (NYSE: RCL) reports that it has received court approval to acquire the ultra-luxury cruise ship Endeavor (ex-Crystal Endeavor). Originally delivered to Crystal Cruises in 2021 by German shipbuilder MV Werften, the ship will be renamed Silver Endeavour when it officially joins the wholly owned Royal Caribbean subsidiary, Silversea Cruises’ fleet, this month.

Crystal Cruises (and MV Werften) were all caught up in the Genting Hong Kong liquidation mess and Crystal Endeavor was operating in Antarctica back in January when Crystal Cruises announced that it was suspending operations.

The purchase price for the vessel was $275 million, significantly below the cost of construction, says Royal Caribbean. The vessel was fully financed through a 15-year unsecured term loan, guaranteed by the German export credit agency, Euler Hermes, with no amortization payments in the first two years. According to Royal Caribbean, the acquisition is expected to be immediately accretive to earnings, cash flow and ROIC.

“With Endeavour, we are seeking to grow our world class fleet to meet the exceptional demand for ultra-luxury expedition cruising, while also enhancing our profitability profile and affirming Silversea’s position as the industry’s leading ultra-luxury and expedition cruise line,” said Jason Liberty, president and CEO, Royal Caribbean Group.

Built to PC6 polar class specifications, the 164 meter long, 200-passenger ship can operate all of Silversea’s current expedition itineraries and is designed specifically to take travelers to the world’s most remote destinations, including both polar regions.

“The expedition cruising industry is poised to resume accelerated growth driven by demand among high-end, affluent customers for travel to remote and hard-to-access destinations,” said Roberto Martinoli, president and CEO, Silversea Cruises. “This ship will be the fourth vessel to join Silversea’s fleet since 2020, which demonstrates our commitment to growth.”

As part of the ongoing RCL Cares program, Royal Caribbean Group will protect the deposits of guests who were originally booked on Crystal Endeavor and make a new booking on one of the Group’s global brands – Royal Caribbean International, Celebrity Cruises and Silversea Cruises.

“We believe those Crystal guests will receive back their deposits, but we want to give them added assurance,” Liberty added.

To the extent the Crystal Endeavor guests do not receive their deposits back from Crystal or other sources, the Royal Caribbean Group will refund any amount paid on their new booking up to the amount of their lost deposits from Crystal. Complete terms of the offer will be provided on each brand’s website soon.

Silver Endeavour is scheduled to begin service winter 2022/2023, spending its inaugural season in Antarctica starting November 2022.