TPG, OTPP to acquire 35% stake in Genting Hong Kong’s Dream Cruises

Genting Hong Kong Limited (GHK) (SEHK: 678) has agreed to sell a 35% equity interest in Dream Cruises, one of the leading cruise brands owned by GHK, to TPG Capital Asia, TPG Growth and Ontario Teachers’ Pension Plan (Ontario Teachers’, OTPP) for US $489 million.

The transaction values Dream Cruises at total equity at US $1,397 million and enterprise value at US $3,268 million.

The purchase will be made in two tranches, with the first guaranteed tranche of at least 24.5% for US$342 million expected in September, and a second tranche of up to 35% in total expected by December of 2019. Additional incentive payments will be paid on achievement of certain profitability level of Dream Cruises and delivery of each of the Global Class ships.

The investment will enable completing two “Global Class” ships for Dream Cruises, the first of which will be delivered in early 2021 and the second in early 2022

Genting Hong Kong, formerly Star Cruises Limited, is a leading global leisure, entertainment and hospitality enterprise, with both land and sea-based businesses including Genting Cruise Lines comprising of Star Cruises, Dream Cruises, and Crystal Cruises, along with German shipyards MV Werften and Lloyd Werft, prominent nightlife brand Zouk, and Resorts World Manila (Philippine Stock Exchange: RWM), an associate of Genting Hong Kong.

Genting Hong Kong is majority controlled by Tan Sri Lim Kok Thay, Chairman of Genting Berhad, and his family members and interests.

photo credit: Genting Hong Kong

News Release

Genting Hong Kong To Sell 35% of Dream Cruises to TPG Capital Asia, TPG Growth and Ontario Teachers’

Sale will Strengthen Genting Hong Kong as it Embarks on Completing two “Global Class” ships for Dream Cruises, the first of which will be delivered in early 2021 and the second in early 2022

Hong Kong, August 6, 2019 – Genting Hong Kong (GHK) today announced an agreement for TPG Capital Asia, TPG Growth and Ontario Teachers’ Pension Plan (Ontario Teachers’) to acquire up to a 35% equity interest in Dream Cruises, one of the leading cruise brands owned by GHK.

The consideration for the 35% equity interest is US$489 million, valuing Dream Cruises total equity at US$1,397 million. With assumption of net debt of US$1,871 million, the enterprise value of the transaction is US$3,268 million. The transaction will result in a gain of approximately US$470 million, which will increase the net asset value of each GHK shares by US 5.5 cents or HK 43 cents.

The purchase will be made in two tranches, with the first guaranteed tranche of at least 24.5% for US$342 million expected in September, and a second tranche of up to 35% in total expected by December of 2019. Additional incentive payments will be paid on achievement of certain profitability level of Dream Cruises and delivery of each of the Global Class ships.

“Dream Cruises is the premium brand for the fast growing Asian-sourced cruise passenger, with the vision that they will be able to cruise globally in all regions of the world with Dream Cruises,” said Tan Sri KT Lim, Chairman and CEO of GHK. “The investment by TPG and Ontario Teachers’ will help Dream Cruises to have the youngest and technologically most advanced fleet of quality German built cruise ships with legendary Asian service. And we are delighted to partner again with TPG as we did on Norwegian Cruise Line Holdings Ltd. in 2008,” he added.

“Dream Cruises is an iconic and innovative brand with a strong product offering that is well positioned in an attractive industry which will benefit directly from rising Asian wealth and outbound tourism,” said Ganen Sarvananthan, Co-Managing Partner of TPG Capital Asia. “TPG Capital Asia and TPG Growth are delighted to partner again with Genting HK and Ontario Teachers’ in developing an Asian cruise brand, leveraging the years of experience that Genting HK has had in this sector. We look forward to contributing in our own way to this partnership.”

“The investment is a testament of Ontario Teachers’ positive view on longer term growth in Asia and is part of our continued drive to expand our global footprint by strengthening our local presence in Asia. It is an excellent example of our commitment to work alongside quality partners that are highly experienced in investing and operating in the region,” said Ben Chan, Regional Managing Director, Asia Pacific at Ontario Teachers’.

The investment is expected to close later in 2019, subject to customary closing conditions and regulatory approvals.

Investor Relations & Media Contacts

For investor relations and editorial, please contact:

Ms. Cheah Yoke Sim
Corporate Finance & Investor Relations
Hong Kong SAR
Tel : (852) 2378 2000
Fax : (852) 2957 4616
Email : yokesim.cheah@gentinghk.com

About Genting Hong Kong Limited (“Genting Hong Kong”)

Genting Hong Kong is a company that owns and operates three global cruise brands: Dream Cruises, Star Cruises and Crystal Cruises with a fleet of 10 ocean ships and 5 river ships, covering the contemporary, premium and luxury segment of the cruise market. GHK also have an interest in the Manila Resorts World Casino and Zouk, a lifestyle brand. Additional information can be found on www.gentinghk.com.

About TPG

TPG is a leading global alternative asset firm founded in 1992 with more than $108 billion of assets under management and offices in Austin, Beijing, Boston, Dallas, Fort Worth, Hong Kong, Houston, London, Luxembourg, Melbourne, Moscow, Mumbai, New York, San Francisco, Seoul, and Singapore. TPG’s investment platforms are across a wide range of asset classes, including private equity, growth equity, real estate, credit, and public equity. TPG aims to build dynamic products and options for its investors while also instituting discipline and operational excellence across the investment strategy and performance of its portfolio. For more information, visit www.tpg.com.

About Ontario Teachers’

The Ontario Teachers’ Pension Plan (Ontario Teachers’) is Canada’s largest single-profession pension plan, with C$191.1 billion in net assets (all figures as at Dec. 31, 2018). It holds a diverse global portfolio of assets, approximately 80% of which is managed in-house, and has earned an annual total-fund net return of 9.7% since the plan’s founding in 1990. Ontario Teachers’ is an independent organization headquartered in Toronto. Its Asia-Pacific region office is located in Hong Kong and its Europe, Middle East & Africa region office is in London. The defined-benefit plan, which is fully funded, invests and administers the pensions of the province of Ontario’s 327,000 active and retired teachers. For more information, visit otpp.com and follow us on Twitter @OtppInfo.

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.