Premier: New Financing Will Stabilize Line

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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 said.

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 1999."

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.

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