The Fijian Holdings Limited (FHL) today signed an agreement to own South Seas Cruises (SSC) and Blue Lagoon Cruises (BLC) for FJ$62.57 million.
FHL acting group chief executive Nouzab Fareed said prior to the acquisition of SSC, FHL had sold its wholly owned subsidiary Blue Lagoon Cruises (BLCHL) to SSC for FJ$12.57.
Fareed said BLCHL owns 93.2 per cent of BLC, a public company that owns and operate two luxury cruise ships along the Yasawa Group.
He said this is the largest acquisition ever by FHL following its acquisition of RB Patel Group in 2008.
The FHL Board valued SSC at FJ$50 million as a standalone company and as such the combined value of SSC and BLC is FJ$62.57 million.
The acquisition of 100 per cent of SSC from Marine Tourism Holdings (MTH) was also signed today where SSC will now become a fully owned subsidiary of FHL.
Fareed said they are very confident to have 100 per cent as a best option for SSC.
The FHL Board today also signed a management agreement between SSC and Cruise Whitsunday Pty Ltd (MTH), a subsidiary of MTH for a period of years.
FHL Group chairman Iowane Naiveli said the investment accelerate their strategy in growing the FHL portfolio in strong sectors of the tourism market that will continue to perform and provide positive return on investments.
FHL uses its cash at bank to pay for the initial $10 million today and another $20m will be paid within the next 60 days and the balance will be paid over a period of 7 years under an agreed repayment plan and interest rate.
Fareed said for the balance of payments for the remaining 7 years, 90 per cent collected revenue from SSC and BLC will be used for payment.
SSC executive director Roger Dold said he wanted to retire from the business and is excited about the agreement.
The management agreement will allow FHL to maximise its return on investment in SSC.
Fareed said based on their forecasted expectations of SSC , the first few years are expected to be challenging with the repayment of this investment.
However, he said they are positive that this will largely benefit shareholders in not too distant future,
By Ropate Valemei