Friday, May 10

Saga floats thought of promoting stake in ocean cruises arm

Saga is exploring methods to launch cash from its ocean cruises operation which may contain promoting its two flagship vessels or offloading your complete enterprise underneath a licensing association.

Sky News has learnt that the closely indebted firm, which is listed on the London Stock Exchange, is working with advisers on a spread of potential choices, which additionally embody promoting a stake within the division.

City sources stated on Thursday that the method, which has been underneath means for quite a lot of weeks, had but to achieve any agency conclusions.

They added, nonetheless, that Saga’s board had decided that its ocean cruises arms, which operates the Spirit of Adventure and Spirit of Discovery, provided the likeliest path to unlocking substantial new financing.

In November, Sky News revealed that Saga, which specialises in offering insurance coverage and holidays to the over-50s client, had drafted in bankers from Lazard to advise.

Saga, which is scheduled to replace the City on buying and selling subsequent week, has been labouring underneath the load of a giant debt pile for years.

In the autumn it tapped its chairman, Roger de Haan, for a £35m, including to the substantial sum of cash it owes him.

Reviving the sale of its insurance coverage underwriting division, which was on the playing cards a 12 months in the past, is just not thought to have been dominated out altogether.

However, extra life like options are stated to incorporate promoting and leasing again the 2 cruise ships, which at the moment are working at near-capacity, promoting a stake within the division or outsourcing its operation to a different cruise firm underneath a licensing deal.

The analysis of latest company exercise by Saga’s board comes forward of a £150m bond compensation which is due in May however which is known to be repayable from cash lent by Mr de Haan.

In its interim outcomes introduced final September, Saga’s steadiness sheet was saddled with internet debt of greater than £650m.

The firm’s shares have fallen by practically a fifth over the last 12 months, leaving it with a market capitalisation of simply over £200m.

Mr de Haan, the corporate’s former chief govt, was parachuted again in to steer a turnaround in the summertime of 2020, investing £100m as a part of a broader capital-raising.

That got here after it spurned a takeover bid from personal fairness traders.

At the beginning of final 12 months, it unveiled a worldwide web site known as Saga Exceptional, aimed toward offering recommendation and providers to over-50s customers.

However, it has been pressured to deal with a change of management in current weeks following the resignation in November of chief govt Euan Sutherland.

He is being changed by finance chief Mike Hazell.

A big a part of the corporate’s present travails relate to circumstances within the motor insurance coverage market, which it stated had been impacting its capacity to generate money and scale back debt.

Saga had additionally been in talks to promote its underwriting enterprise to Open, an Australian insurer, however did not finalise a transaction.

Mr de Haan, the son of the corporate’s founder, had already lent Saga £50m earlier than extending that to an £85m facility earlier within the autumn.

Shares in Saga closed on Thursday at 146.8p.

A spokeswoman for the corporate declined to remark.

Content Source: information.sky.com