Carnival to partner with Iberojet Cruceros in joint venture

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Carnival Corp. and Spain-based Orizonia Corp. signed a letter of intent to form a joint venture under Orizonia's Iberojet Cruceros brand.

The joint company would be valued at $417 million, with $235 million in debt, leaving a net capital value of $182 million. Carnival would own 75% and Orizonia 25%.

The agreement would transfer Iberojet Cruceros' existing fleet to the joint venture company and grow the fleet over the next several years.

Iberojet's fleet now consists of two cruise ships, the 834-passenger Grand Voyager and the 1,196-passenger Grand Mistral, which the companies say are the newest ships in the Spanish cruise market.

For Carnival, the venture would be an opportunity to expand into the Spanish tourism market, which Carnival Chairman and CEO Micky Arison called "one of the fastest-growing segments of the European vacation industry."

The transaction is expected to close in second-quarter 2007 if approved by both companies' boards of directors and the relevant regulatory bodies. Carnival reported that it expects the transaction to be neutral to its earnings for the 12-month period following the closing of the deal.

Pier Luigi Foschi, chairman and CEO of Carnival's Costa Cruises unit, would serve as chairman of the board of the joint venture. The existing management of Iberojet Cruceros would continue operating the company, with its president, Alfredo Serrano, reporting to the board of the new company.

To contact reporter David Cogswell, send e-mail to [email protected].

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