Genting HK

Genting HK: its 50% owned Norwegian Cruise Line (NCL) has filed for an IPO in the US, that may raise as much as US$424m. NCL is offering 23.5m shares at US$16 – 18 each. The midpoint of the range values the Miami-based company at US$3.41 b, or more than 20x trailing P/E. That compares with ~17x P/E for Royal Caribbean Cruises and 23x for Carnival Corp, both competitors. Recall, the company previously filed in Oct 2010 for a US$250m IPO, before scrapping the plans in July 2011. NCL is offering about 12% of its shares in the sale, and the proceeds will be used to redeem or prepay outstanding debt. The sale is scheduled for Jan. 17. Existing owners, Apollo, TPG Capital and GENHK aren’t selling stock in the IPO. NCL operates a fleet of almost a dozen ships and plans to expand with several more over the next few years. NCL generated US$2.26b in revenue in the 12 mths through Sep operating trips to destinations including Europe, Alaska, Bermuda and Hawaii. After the IPO, GENHK will own about 44% stake in NCL. GENHK’s current market cap is US$2.95b, based on the last traded at US$0.38. Past Street valuations estimated that NCL contributed a third to GENHK’s fair value. This could imply that the market is pricing GENHK’s NCL stake at US$0.98b, vs the potential market value at US$1.55b, based on the higher end of the IPO price range. The surplus valuation of US$0.57b may improve GENHK’s market value by an additional US 7.3 cts per sh to US$0.453/sh.