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Monday, March 4, 2024

Hurtigruten bails out its shipyard

Norway’s coastal voyage company Hurtigruten AS and the investors behind it have helped recapitalize the Kleven Verft shipyard in Ulsteinvik, collectively providing NOK 300 million in fresh capital. The company currently has ultra-modern hybrid vessels on order at the yard, and neither Hurtigruten nor its owners wanted to risk any delivery delays or additional costs.

Hurtigruten and its owners now hold around 40 percent of Kleven Verft, the shipyard where it’s building new hybrid cruiseships. PHOTO: Kleven Verft/Per Eide

One of Hurtigruten’s owners, high-profile hotel tycoon Peter Stordalen, told newspaper Dagens Næringsliv (DN) on Tuesday that he and his fellow investors weren’t merely mounting a “rescue operation” for a shipyard hit by Norway’s recent economic downturn. DN reported that it also logged heavy losses when a Malaysian customer dropped an order for a new vessel.

Stordalen claimed he and the others were investing “because we believe in the yard and because the Kleven family (that has owned it) believes in it.” He said he thinks other investors would have acted if those behind Hurtigruten had not. They now own 40 percent of the yard, according to DN.

Hurtigruten, however, has orders for two new cruiseships at Kleven that are specially designed for Arctic waters. DN reported that the first modules for the “explorer ship MS Roald Amundsen” are already out and the vessel is due for the delivery next summer. A sister-ship, the MS Fridtjof Nansen, is due for delivery the year after. Without a solution for the yard’s financial problems, delivery of both vessels could have been jeopardized.

“Construction of the vessels would probably have have ceased for a while, at least until we had a solution,” Ståle Rasmussen, chief executive of Kleven, told DN, noting that Kleven’s banks had set capital demands in order to finance ongoing operations. “But now we avoided that. Everything is running like it should.”

It’s been the latest challenge for an otherwise profitable Hurtigruten that also faces changes in the contract it’s had with the state to provide regular liner service to 34 ports between Bergen and Kirkenes every day of the year. The company, which DN reports has also been considering a sale or stocklisting, had not expected to recapitalize the yard. Stordalen put a positive spin on it all, while neither he nor his investor colleagues would comment on long-term ownership prospects or the proposed stocklisting. Speculation has also risen that Hurtigruten may become purely a cruise company, and leave the traditional coastal shipping service for passengers, cargo and the mail, to others. staff



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