Kloster Cruise has been the subject of extensive internal reorganization which has seen the termination of several senior executive positions, including the resignation of Jorn Eriksen, President of VARD, parent company to Kloster, and layoffs of a reported 80 to 90 staff positions and an undetermired number of ship personnel.
At the same time, Royal Viking Queen will be reducing its former four-ship fleet further to two ships, the 740-passenger Royal Viking Sun, which entered service 1988 and the new 212-passenger Royal Viking Queen, which is under construction at Seebeckwerft in Germany, for delivery in March 1992. The Royal Viking Sky will be transferred to Royal Cruise Line in December of 1991 and renamed the Royal Odyssey after $30 million refurbishment and expansion from 710- to 880-passenger capacity. Last year the Royal Viking Star was transferred to Norwegian Cruise Line and renamed the Westward.
The Royal Viking Sky will be “retired” from RVL service in April of 1992, but company executives would not comment on its future. One source, however, said that it may be put up for sale in order to demonstrate the company’s value to the stock market. Vard A shares currently trade for around NOK 52.50 and B shares for NOK 52.00.
The reorganization at Kloster Cruise follows what looks like a good year for the company; fourth quarter and annual report will be released on February 15.
However, the executive changes follow a series of past management changes and would seem to do little to give the company the stability it needs. The reduction of the RVL fleet is also a drastic move, contributing to confirming rumors of product deterioration and market erosion after RVL management and operations were merged into the larger organization.
Company executives, however, are optimistic, claiming that the changes make the company stronger, creating a more meaningful pyramid structure with Norwegian Cruise Lines at the base, Royal Cruise Line and RVL at the very top. But it may take some time to convince investors as Vard shares traded for only NOK 52 in Norway in spite of a published NOK 140 evaluation by independent analysts.
Vard also expects to complete a separation of its various business interests some time in the second quarter, whereby the cruise and ferry operations would be merged into one company, and its other interests would be merged in another company.
Correction:
Royal Caribbean Cruise Lines has reported that the Monarch of the Seas sails her first cruise from San Juan on November 17, 1991, and not on November 26 as was reported in the 1/15/91 issue of CIN.
The report in the last issue of CIN that the Sea Venture. Sea Venture Cruises has been repossessed by the financial institutions which are financing the project is wrong, according to Anastasios Kyriakides, Chairman and President of Sea Venture. He told this newsletter that he is still working on the project and hopes to launch the cruise line some time in the future.
