MIAMI -- The new management team of Premier Cruises said the $20
million in equity financing the company is seeking -- when combined
with new loans -- "should address any concerns regarding our
long-term financial stability."
Daniel Huwel, Premier's executive vice president and chief
financial officer, said a Wall Street investment bank will help
raise the equity.
In the meantime, Premier received a commitment of $35 million in
loans from its investment banking firm, Donaldson Lufkin &
Jenrette, of which some $20 million will be available after Premier
pays off existing loans. The funds will ensure that Premier will
meet an $8.8 million interest payment that comes due Sept. 1, Huwel
In addition, Huwel said, Premier will increase its Federal
Maritime Commission bond obligations from $10 million to $15
million, the maximum required by law.
According to financial analyst John Maxwell, who follows the
company for Societe Generale Securities Corp., the loan commitment
"buys Premier time to meet its immediate demands" until the cruise
line can raise new equity.
Maxwell said the company has a reasonable chance of raising the
new funding, explaining, "Premier is having some problems, but the
industry is doing extremely well. People who are confident in the
new management team could provide equity."
John Erik Nygaard, the new chief operating officer, said his
experience in turning around Color Line, a large Norwegian cruise
ferry company, is appropriate to his task at Premier.
He said the management's business plan for Premier "is working,
and we will enjoy stronger revenues in the third and fourth
quarters and a much healthier financial return for the full year
The plan, he said, calls for annual cost savings of $7 million,
bringing air/sea operations in house for greater control and
focusing more on U.S. ports to reduce air costs to passengers.