Postponed NCL Offering May Delay New Ship

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OSLO, Norway -- The postponed U.S. issue of more than $226 million of stock for Norwegian Cruise Line could delay plans to order a second Norwegian Sky Class ship, the cruise line said.

The Norwegian Sky Class series also holds an option for three more vessels planned for delivery in 2001, 2002 and 2003.

In postponing its U.S. stock issue, NCL reported that the company's "present performance is good," adding that for the first time this year all its vessels are fully utilized.

NCL Holding, the cruise line's Oslo-based parent company, postponed the planned issue following the precipitous drop in the U.S. stock market since July 20, the day NCL published a prospectus for the new stock issue.

Instead, NCL raised just under $40 million on the Norwegian stock market, where the company's stock is already traded.

NCL said that despite the reduced funding, the company has enough equity financing "for all ongoing projects," including construction of the Norwegian Sky, a 2,000-passenger liner that will be delivered in July 1999, as well as the lengthening of the Norwegian Majesty, to be completed next April.

According to NCL's prospectus, the company was not looking to the U.S. equity market to raise funds for the first vessel in the Norwegian Sky Class. NCL did say it would use $26 million of the proceeds to help fund the lengthening of the Norwegian Majesty.

In addition, NCL said it expected to use another $12 million to help pay for Orient Lines, which it acquired earlier this summer. By raising just under $40 million in the Norwegian equity market, NCL presumably could apply the funds to those two projects.

However, NCL said in its prospectus that it expected to apply $85 million of the proceeds of the U.S. stock issue to fund construction of a second Norwegian Sky-class vessel.

NCL has signed a letter of intent to build the vessel for delivery by 2000, but NCL president Hans Golteus said the project could be delayed. He added, however, that the line has alternative equity financing to meet the cost of other projects that NCL had expected to fund through the postponed stock issue.

According to NCL's prospectus, these costs include $71 million to buy back stock issued in connection with the purchase of the Norwegian Majesty and $32.3 million for general working capital.

In addition, NCL will need further major influxes of equity and other financing to meet a series of ambitious projects, according to the prospectus. NCL said that the third quarter was shaping up as highly profitable, with July showing results that exceeded last year's entire third quarter.

Bookings for the third and fourth quarter of 1998, as well as the full year of 1999, are above levels reached at this time last year, NCL said. In addition, NCL's pricing and passenger counts have risen, the company said.

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Joint Venture Would Target U.K.

OSLO, Norway -- An ambitious plan for NCL to start up a U.K.-based cruise line in partnership with the Thomas Cook Group Ltd. is unaffected by the NCL delay in issuing new equity, the line said.

NCL's prospectus states that the company signed a letter of intent to form a joint venture with Thomas Cook to operate Caribbean and Mediterranean cruises beginning in 1999 or 2000, targeted primarily to the U.K. market.

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