Saudi funds discuss possible purchase of ultra-luxury seaborne at Carnival

An aerial view of the Seaborne Encore cruise ship docked at Bodrum Cruise Harbor on April 27, 2022 in the Mughals of Turkey.

Ali Balli | Anadolu Agency | Getty Images

Carnival is in preliminary talks to sell its Seaborne ultra-luxury cruise brand to the Saudi Sovereign Wealth Fund, people familiar with the situation told CNBC.

Talks are still going on between the two sides. An agreement of this size would give the Saudis a strong foothold in the cruise industry, at a time when travel continues to return across the Middle East.

This will give Carnival access to more capital, with shares losing more than 40% in the last three months. The price tag for Seaborne was not immediately clear.

Carnival said it would not comment on rumors or speculation. The Saudi Fund, also known as the Public Investment Fund, did not immediately respond to a request for comment.

Carnival talks to sell Seaborne in less than a week to raise more than 1 billion in the debt market with a 10% yield.

Seaborne came on the market in 1988 and operated six ships. Its destinations range from Antarctica to the Middle East to the Caribbean.

The Saudi Sovereign Wealth Fund, also known as the Public Investment Fund, bought a stake in Carnival in 2020 at the height of the epidemic. According to Factset, it currently has a 5.1% stake in Carnival.

Private equity firms have also been buyers in the cruise space. In March 2021, Royal Caribbean sold its Ajmara cruise brand Cicamor to partners for 201 201 million. Both TPG and Apollo Group invested billions in Norwegian cruise lines in 2008, finally taking the cruise operator public in 2013.

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