CruiseCarnival Corp. is said to be in preliminary talks to sell its ultra-luxury Seabourn cruise line to Saudi investors.

Is Saudi catching a whiff of luxury cruise mania?

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Seabourn's expedition ship Seabourn Venture is set to enter service in July.
Seabourn's expedition ship Seabourn Venture is set to enter service in July.

Carnival Corp. is considering selling its luxury Seabourn cruise line to the Saudi sovereign wealth fund, according to a CNBC report.

The report, citing unnamed sources, said that Carnival was in "preliminary discussions" to sell Seabourn. It said that the deal would give the Saudis a "stronger footprint" in the cruise industry while also giving Carnival access to more capital. 

Carnival may also want to pare down debt. Last week, Carnival Corp. priced a private debt offering of US$1 billion in senior unsecured notes at an interest rate of 10.5%. The proceeds will be used in fiscal 2023 to make scheduled principal payments on prior debt.

Before this latest debt issue, Carnival Corp. was carrying about US$35 billion in total debt.

Regarding the CNBC report, a spokesman for Carnival Corp. said the company would not comment on "rumours and speculation." 

The Saudi fund, known as the Public Investment Fund, acquired an 8.2% stake in Carnival Corp. at the beginning of the pandemic (the CNBC report, citing FactSet, puts its current stake at 5.1%).

Saudi Arabia has plans to move aggressively into tourism, earmarking US$1 trillion for the travel and tourism sector through 2030. And the kingdom appears to be eager to get more involved with cruising. It has established Cruise Saudi, a publicly funded effort to develop ports, destinations and excursion options to attract more ships to the Red Sea and Persian Gulf.

An executive at Cruise Saudi did not immediately respond to a request for comment. 

Seabourn currently has five ships, plus two expedition vessels under development for delivery this year and next.

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