Top executives of Royal Caribbean Cruises (ROC) and Louis Cruise Lines took time out from meetings with New York investors to describe their future plans, their efforts to increase ROC stock's visibility - including the recent listing in Frankfurt - and to reiterate their position on the dispute with builder Blohm+Voss.
According to ROC's new CEO, Yiannos Pantazis, problems with the Olympic Explorer include "engine vibration and engine ventilation - technical issues that do not affect the passenger experience." He confirmed that these issues affect both the Olympic Explorer and the earlier Olympic Voyager, and that once repairs to the second ship are made (which ROC estimates would take 40-50 days) repairs would need to be made to the first ship. As to the shipyard's assertion that it never received official notification of ROC's issues with the new ship, ROC shareholder Andreas Potamianos asserted, "That is completely untrue. We could very easily release the letter that was sent to the yard (detailing the problems), but we've decided not to, because it is in our interest to solve this issue (amicably)." Potarnianos added that ROC's German bank has confirmed in writing that all financing is available assuming delivery of the ship.
While a revised Sept. 15 launch date has been announced for the Olympic Explorer, Pantazis admitted that the date depended on how the dispute resolution progressed. "We are taking bookings after Sept. 15, but we're advising customers there is a possibility of cancellation. If that happens, they will be refunded or offered a cruise on another Royal Olympic ship."
ROC executives also revealed that the new ships would be redeployed next summer to minimize the impact of the Israeli-Palestinian conflict. The Olympic Voyager will sail in Northern Europe, with cruises to the British Isles, Scandinavia, Greenland, Iceland and possibly the Arctic Circle, while the Olympic Explorer will be deployed on alternating Eastern and Western Mediterranean voyages stretching from Egypt on the eastern route to Barcelona on the western circuit.
Following this year's $20 million loan by Louis, the ownership structure of ROC has been reorganized as follows: 51 percent of the company is owned by ROC Holdings, which is now 70 percent owned by Louis, 30 percent by Potamianos. Of the remaining 49 percent of ROC, Louis owns 4.5 percent, with the remainder owned by Greek and American investors.
According to Louis' Costakis Loizou, "A year and a half ago, when the shares were at around $2, we paid $8 per share because we obtained control. I believe that the risks are justified, and we are very enthusiastic about our investment." Loizou said the recent Frankfurt listing would increase ROC shares' visibility. "After Athens, the Frankfurt exchange is the most important to Greek investors," he said.