www.forbes.com/sites/davidnikel/2024/11/30/what-new-ownership-means-for-norways-hurtigruten/David Nikel
Senior Contributor
David Nikel is a travel writer covering cruising and Scandinavia.
Nov 30, 2024,10:54am
Norway’s Hurtigruten group has been acquired by an ownership group consisting of existing investors. Hurtigruten CEO Hedda Felin called the move a “significant milestone.”
A large chunk of existing debt will be written off as creditors take the wheel, while an investment of more than $380 million is set to breathe new life into the cruise line, which has struggled financially since the pandemic.
Hurtigruten has for some time been a complex business. It runs coastal cruises on the historic Norwegian coastal route, but also operates expedition cruises and runs travel services in both mainland Norway and Svalbard.
With the expedition cruise business set to be fully spun off, the new owners intend to focus Hurtigruten back on its core destination of Norway once the financials are completed in January 2025.
Financial Stability
First and foremost, the new ownership structure and investment should bring some much-needed stability to the group, which has struggled with financial uncertainty for the last few years.
The transaction will reduce the outstanding debt of the company and its parent company by over €1 billion, resulting in a remaining debt of approximately €400 million, according to a press release.
Part of the debt will be converted into shares in the company that operates the traditional Norwegian business, providing coastal transport along the Norwegian coast. Additional debt will also be introduced, and some existing maturities will be extended.
Existing investors including Arini Capital Management, AlbaCore Capital, Barings and Cyrus Capital Partners have stepped up to lead the takeover.
Present majority owners—London-based private equity firm TDR Capital, which included notable Norwegian business profiles Trygve Hegnar and Petter Stordalen—do not feature on the new-look board.
Felin, who will remain in place to lead the Norway-focused business, expressed her gratitude to the outgoing investors.
Expedition Cruises Will Be Separate
Hurtigruten is best known for its operations on the 130-year-old Norwegian coastal route, but has faced stiff competition from newcomer Havila Voyages in recent years.
Since losing part of its exclusive contract, the company shifted some of its ships into expedition-based tourism, eventually launching Hurtigruten Expeditions, which rebranded to HX.
The acquisition marks the end of the division between HX and Hurtigruten, allowing the latter to fully focus on Norway once again. From January 2025, both Hurtigruten and HX will exist as standalone entities with their own ownership and leadership teams.
A Focus On Norway
The focus on Norway is an important strategic move for Hurtigruten, which has seen rival company Havila Voyages win awards for its battery-powered ships.
Although Hurtigruten has made substantial investments in its fleet, much of that investment including some impressive new builds have been in the HX expeditions part of the group.
At present the Norway business includes seven ships operating the Norwegian coastal route, together with MS Trollfjord. The refurbished ship is used on Hurtigruten’s new cruise-only ‘signature voyages’, including the Svalbard Line from Bergen to Longyearbyen.
Whether the renewed focus on Norway will see an expansion of these more cruise-like experiences remains to be seen.
Felin said Hurtigruten “will remain a group consisting of our operations along the Norwegian coast and in Svalbard. We will deliver the same great guest experiences” adding that there will be no consequences for employees, guests, or partners.
www.hurtigruten.com/group/investors/articles/hurtigruten-group-sells-hurtigruten-and-hx-hurtigruten-expeditions/Press release.
Hurtigruten Group Sells Hurtigruten and HX (Hurtigruten Expeditions) To Investors Contributing Over EUR 500m of New Capital Across the Two Businesses
Funding is Fully Committed
Planned Split of Hurtigruten and HX (Hurtigruten Expeditions) into Standalone Businesses Will be Completed in January 2025
Over EUR 500m of New Capital Committed by New Shareholders, Including More Than EUR 250m of New Funding, Significant Deleveraging and Extension of Maturities
OSLO, Norway (28 November 2024) - Hurtigruten Group (the “Group”), Norway’s leading coastal cruise line and one of the most renowned premium expedition travel brands globally, today announced that it has secured more than EUR 500m of new capital to support business growth and the final phase of the separation of the Group into Hurtigruten and HX (Hurtigruten Expeditions). From January 2025, each business will exist as a standalone entity, with both businesses being owned by a consortium of existing investors.
This transaction marks the beginning of an exciting chapter for both Hurtigruten and HX, with their product positioning and leading sustainability practices providing a unique platform to achieve their long-term potential in their respective markets.
This substantial investment ensures that both standalone businesses have access to the required resources to fund the next phases of their global growth potential. The investors are excited to be supporting both companies in their plans to continue to develop innovative travel experiences, while meeting the rising demand for more responsible and meaningful travel globally.
Torben Geisler of Arini Capital Management, which is part of the two consortiums, said, “Today marks a significant chapter in the future of these two companies. With this infusion of new capital and strategic support from our investor groups, both Hurtigruten and HX are poised to enhance their product offerings and explore new markets, while continuing to deliver exceptional travel experiences. Hurtigruten and HX’s incredible workforces have been instrumental in driving the success of both businesses and will continue to be under this new structure.”
James McArthur, Chief Financial Officer at Hurtigruten Group, said, “We are very excited to now achieve what everyone in our organisation has been working towards for a long time. This transaction marks the beginning of an exciting era for both Hurtigruten and HX; both businesses now have tailored ownership teams that have full confidence in their unique market position and long-term potential.”
This landmark transaction is expected to close in January 2025.
For more information, contact the Hurtigruten (press@hurtigruten.com) and HX (press@travelHX.com) media teams.
