Louis Plc, the CSE-listed hotels-to-travel group, is setting up a new holding company with New York-based Searchlight Capital Partners, which will take over ownership of Celestyal Cruises and pump €70 mln in fresh funds.
The agreement, signed on Saturday and announced on the Cyprus stock exchange, calls for the recapitalisation of the cruise company, which will now be owned 60% by Searchlight and 40% by Louis.
Thus, Celestyal will no longer appear in the Louis Plc accounts as a subsidiary but will be regarded as an associate.
The deal will help Celestyal reposition itself as a leading cruise operator in the eastern Mediterranean while allowing for its expansion into the worldwide cruise market and “continue Celestyal’s ambitions to renew and grow its fleet.”
Celestyal operates a fleet of three cruise ships out of Piraeus, including the new flagship, Celestyal Experience, the renamed 1,800-passenger Costa neoRiviera, built in 1993 and bought from Carnival Corp. in July 2020 for an undisclosed amount.
The other two are the 1,664-passenger Olympia and the 1,200 capacity Crystal.
Under the terms of the agreement, Searchlight will provide an initial tranche of €30 mln senior debt financing to Celestyal Cruises and a €10 mln revolving credit facility.
It also provides for additional funding up to €30 mln for development and fleet renewal.
Celestyal Cruises will capitalise on €31.75 mln loans that Louis Hotels had extended.
Due to its majority control, Searchlight will appoint most of Celestyal Cruises board members.
Louis Plc said the deal would impact its 2021 results with an accounting loss of €2-4 mln.
“Prior to the pandemic, Celestyal was on a fast growth trajectory, and Searchlight’s infusion of capital will propel our growth strategy and accelerate our fleet renewal plan,” said Celestyal Cruises’ CEO, Chris Theophilides.
“Our 2022 season is already looking solid.”
“The cruise industry has shown a tremendous amount of resilience coming out of the pandemic, and as Greece’s major, home-porting cruise line, Celestyal has played a pivotal role in the country’s strong tourism recovery,” said Searchlight Partner Ralf Ackermann.
“Celestyal Cruises has always been a strong and robust regional expert and a key component of our tourism portfolio,” said Costakis Loizou, Executive Chairman of the Louis Group.
“With the added financial resources of Searchlight, Celestyal is destined for an even brighter future, and we look forward to being part of realising Celestyal’s full potential.”