Carnival Corporation has signed a letter of intent with Orizonia Corporation, Spain's largest travel company, which operates its own cruise brand under its Iberojet division, to form a joint venture to operate and expand Iberojet Cruceros in Spain.

Iberojet operates two ships, the 28,000-ton, 800- passenger Grand Voyager, formerly the Olympia Voyager. which was built in 2000; and the 47,900-ton, 1,200-passenger Grand Mistral, formerly the Mistral ,built in 1999.

The two ships have an annual passenger capacity of about 60,000, according to estimates by Cruise Industry News, and sail in the Mediterranean from March through November.

Carnival's announcement comes only months after Royal Caribbean Cruises completed its acquisition of Pullmantur, giving Royal Caribbean access to the Spanish market.

At the time of the acquisition, Pullrnantur had four ships with an annual estimated passenger capacity of 106,250. Since then, Royal Caribbean has announced that it will transfer two of Pullmantur's ships to its Celebrity Cruises brand and one Celebrity ship back to Pullmantur.

Carnival's announcement also revealed that two existing vessels will be transferred from unnamed Carnival brands to the joint venture company. It is expected that these may be the older ships in the Carnival Cruises Lines fleet.

Under the proposed transaction, the Iberojet cruise business being contributed to the joint venture company will be valued at 320 million euros, with 180 million euros in debt, representing a net capital value of 140 million euros. Carnival will own 75 percent of the joint venture, with Iberojet owning 25 percent. (Carnival will also hold 75 percent of its joint venture with German TUI).

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