Royal Caribbean Rises on Plan to Sell Azamara Line for $201M

Royal Caribbean rises as the cruise operator plans to sell its Azamara cruise line to the New York private-equity firm Sycamore Partners for $201 million.
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Shares of Royal Caribbean  (RCL) - Get Report rose Tuesday after the cruise operator said it was selling its Azamara luxury cruise line for $201 million cash to the New York private-equity firm Sycamore Partners.

Shares of the Miami company at last check rose 1.7% to $74.17.

The cruise giant will expand its core Royal Caribbean International, Celebrity Cruises and Silversea brands after the sale, the company said.

The transaction will result in a one-time noncash impairment charge of about $170 million, Royal Caribbean said. The company said the sale wouldn't materially affect its results going forward.

The deal, expected to close in the first quarter, will give Sycamore Partners access to the entire Azamara brand, including its three-ship fleet and associated intellectual property, the company said.

"Our strategy has evolved into placing more of our resources behind three global brands, Royal Caribbean International, Celebrity Cruises and Silversea, and working to grow them as we emerge from this unprecedented period," said Chairman and Chief Executive Richard D. Fain in a statement.

"Even so, Azamara remains a strong brand with its own tremendous potential for growth, and Sycamore's track record demonstrates that they will be good stewards of what the Azamara team has built over the past 13 years," Fain added.

In December, Royal Caribbean said it sold two ships in its international fleet, the Wall Street Journal reported. 

In 2019, the company operated a 61-ship fleet after taking two deliveries. It also exited a joint venture for Pullmantur Cruceros, which filed for reorganization under Spanish insolvency laws in 2020, a spokesman told the Journal.

Perella Weinberg Partners was financial adviser to Royal Caribbean and Freshfields Bruckhaus Deringer provided legal counsel. Kirkland & Ellis provided legal advice to Sycamore Partners.