Press release | Third quarter results 2023 and comprehensive recapitalisation Transaction announcement
Last changed: Tuesday, December 12, 2023 7:00 AM
Hurtigruten Group announces its comprehensive recapitalisation Transaction
Hurtigruten Group AS (the “Company”, and together with its subsidiaries, the “Group”) is pleased to announce that it has agreed, with its senior lenders and shareholders, a comprehensive recapitalisation transaction (the “Transaction”) which will significantly strengthen the balance sheet and serve as an important step towards enabling the Group to implement its strategic objective of delivering the legal and operational separation of the business into the ‘HX’ expeditions business with the largest expeditions fleet in the world (“HX”) and its prestigious Norwegian cruise business (“Hurtigruten”).
Key highlights of the Transaction include:
- the injection of EUR 185 million of new liquidity into the Group;
- deleveraging the operating group by reinstating facilities under the senior term facilities agreement and the senior note facility agreement (together the “Senior Facilities”) into (i) new opco facilities with the Company, and (ii) a new holdco facility with the immediate holding company of the Company (the “New Facilities”);
- providing consent by the creditors of the Senior Facilities to implement the business separation of the HX and the Hurtigruten brands of the Group in accordance with the terms of the New Facilities in order to position the Group for future strategic alternatives.
Shareholder Support
As support for the Transaction, the Group’s shareholders have agreed to, among other things, restructure their shareholder loan facilities (in an aggregate principal amount of €143 million) which will be subordinated to the Senior Facilities and have an extended maturity profile to provide further support for the business.
Third quarter results
The Group continues to see improvement in financial performance in Q3 2023, focus is on building occupancy to support earnings recovery and growth. Total revenue in third quarter 2023 was EUR 195 million for Group, in line with the third quarter of 2022.
The Group had positive EBITDA of EUR 36.8 million in the third quarter of 2023 compared to EUR 18.4 million in the same period last year, an increase of EUR 18.4 million. This increased EBITDA is driven by improved financial performance for Hurtigruten, lower ship operating expenses and lower selling, general and administrative (SG&A) expenses, offset by an increase in direct costs attributable to inflation.
Operational cash flow for Group in the quarter was positive EUR 18.0 million compared to outflows of EUR 6.8 million in the same quarter last year driven by higher EBITDA and lower working capital outflow.
To strengthen Group’s financial flexibility, the ultimate shareholders of the Group provided further funding totaling EUR 70 million during the quarter of which EUR 45 million was drawn as of end of Q3 2023. As of end of Q3 2023 Group had EUR 52 million of available free liquidity.
The Group continues to see a positive booking momentum and effect of the strategic changes made by the Group. As of 30th of November 2023, HRN and HX had EUR 329 million in pre-booked revenue for 2024 with good momentum across all key markets, with the 30-day average and 90-day average bookings up 49% and 51% respectively compared to the same time last year.
The Lock-up Agreement
As at 11-December-2023, the Transaction has the support of entities holding, directly or indirectly, over 70% of the total commitments under the Senior Facilities. In connection with the Transaction, the Group also obtained a waiver of the minimum liquidity covenant under the Senior Facilities for the month ending November 2023 on 6 December 2023.
Key terms of the Lock-up Agreement include:
- an early-bird fee of 0.25% to all creditors under the Senior Facilities who accede to the Lock-up Agreement by 28-December-2023; and
- a consent fee of 0.25% to all creditors under the Senior Facilities who accede to the Lock-up Agreement,
in each case payable in kind through the issuance of additional opco senior facility commitments on successful implementation of the Transaction.
The Company has engaged Kroll Issuer Services Limited as the information agent and invites all creditors under the Senior Facilities who wish to access further information relating to the Transaction and the Lock-Up Agreement to visit: https://deals.is.kroll.com/hurtigruten.
Implementation of the Transaction
The Company intends to implement the Transaction on a consensual basis or, if a fully consensual route is not possible, through an English law scheme of arrangement under the Companies Act 2006.
For further information, please contact:
Investor Relations team: [email protected]
Lock-up Agreement:
Information Agent: [email protected]