Kloster Cruise Shake-Up

In a sudden move, Knut Utstein Kloster, Jr., has assumed the position of Chairman and Chief Executive Officer of Kloster Cruise. Kloster, Jr. is also the majority shareholder and Chairman of Vard, parent company to Kloster Cruise.

A brief announcement from Vard states that Kloster, Jr. succeeds Trygve Hegnar. No mention is made of whether Hegnar, who was Chairman and CEO of Kloster Cruise, has resigned or was forced out. Responding to reports last spring that he was planning to resign, Hegnar said that he had no such plans.

Hegnar, who holds direct ownership of about 10 percent of the shares of Vard, will remain a member of the board of Kloster Cruise, according to Vard. He is also a member of the board of Vard.

At the same time, the Vard announcement states that Hans Golteus has resigned as COO and President of Kloster Cruise in Miami. He will also continue to be a member of the board of Kloster Cruise, working on special projects according to Vard.

Kloster Cruise’s operating management is now reporting directly to Knut Kloster, Jr. who has already taken up residency in Miami.

The shake-up takes place as Vard shares hit their lowest level ever at NOK 45 on the Oslo Stock Exchange.

Hegnar was appointed CEO of Kloster Cruise in 1988. As he divided his time between Norway and the United States, Golteus was promoted from Executive Vice President of Cruise Operations to President and COO.

Thus, during the last few years it seemed as if Kloster Cruise was starting to benefit from a stable management. In 1988, Kloster Cruise posted earnings of $33.8 million; $43.4 million in 1989; and $30.8 million in 1990. But in 1991, citing the Gulf War and the recession, Kloster Cruise posted its first loss on record of $19.7 million.

In 1992, as the recession lingers on, Kloster Cruise has improved its operating income significantly over 1991, and posted only a minor net loss after the ftrst six months. The outlook is for improved earnings in the third and fourth quarters.

But the stock market in Norway seemd to have lost confidence in Kloster Cruise as the shares have been continuously sliding downwards. Also, in the United States, analysts were beginning to express scepticism as to Hegnar’s ability to turn the company around. It also hurt him when he last year promised that 1992 would be Kloster Cruise’s “Best Year Ever.”

The full potential of Kloster Cruise may not have been realized since the 1970s because of a succession of top executives. What this company needs is stability and commitment to a long-term strategy.

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