Royal Caribbean Cruises Ltd. (RCCL)
said it has been informed that its two largest
shareholders, Cruise Associates and A Wilhelmsen
AS, have terminated the agreement that exists
between them. RCCL said it is not a party to the
agreement and the move will have no material
effect on its operations.
“This action is solely between
the two shareholders and does not involve the
company,” said Richard Fain, RCCL’s chairman and
CEO. “We do not expect today's announcement to
result in any change in the company's operations
or strategic direction.”
Under the agreement, the two
shareholders had agreed to vote their shares for
the election as directors of four nominees of
each shareholder. With the termination of the
shareholders’ agreement, the two companies are
no longer obliged to vote their shares in this
manner.
All existing directors
(including those nominated by Cruise Associates
and A Wilhelmsen) are expected to continue to
serve as directors in accordance with RCCL’s
articles and by-laws, and no change in its board
membership or management is contemplated.
RCCL’s directors will continue
to be elected by a vote of its shareholders,
except that vacancies are filled by the board
for their unexpired terms. The directors are
elected for staggered three-year terms. The only
change is that, under the Shareholders'
Agreement the two shareholders previously agreed
to vote for each other's nominees. Now, they are
free to vote as they wish.
RCCL said it understands that,
with the termination of the shareholders'
agreement, Cruise Associates plans to distribute
its RCCL shares to its partners, who in turn may
further transfer shares to their respective
owners.
The company said there is no
indication that the termination of the agreement
is related to the recent turmoil in the
financial markets or to the recent drop in
RCCL's share price. It also will not have any
effect on RCCL’s loans or debt instruments, and
there will be no impact to the company's tax
position.
In a note, Wells Fargo Securities said the termination was likely executed to give each shareholder party ‘additional flexibility,’ with the possible intent to re-allocate or distribute RCL holdings among the various related entities.Bottom line, said Wells Fargo analyst Tim Conder: ‘We view this announcement as a non-event that will likely have little net impact on RCL shares.’
A. Wilhelmsen is a Norwegian corporation whose indirect beneficial owners are members of the Wilhelmsen family. According to a mid-April filing, the group held 41.96m RCL shares, or a 19.34% stake.
A spokeswoman for A. Wilhelmsen in Oslo told Seatrade Insider her company has no comment beyond the information in a Royal Caribbean news release.
Cruise Associates held 33.28m shares, or 15.34%, while Osiris Holdings, a general partner, had 37.9m shares, or 17.47%. Cruise Associates is a Bahamian general partnership whose indirect beneficial owners are various trusts for certain members of the Pritzker family and a trust for certain members of the Ofer family. Osiris Holdings is registered in Monaco.
Sammy Ofer, the patriarch of the Ofer family, died June 3. He was 89.
Ian Bailey, vp investor relations for Royal Caribbean, said the company was not given any guidance on what drove the termination of the agreement so he could not speculate. 'We're not privy to the decision making or the thought process,' he said. 'There could be a ton of different reasons behind it.'
