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Old 08-17-2007, 07:10 PM
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Ron Clark Ron Clark is offline
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Quote:
Originally posted by Redlinekid2:
Too bad that NCL America was flawed from the start. NCL should have restored the Big U as a 5-Star Hotel ship in NYC.

The problem with the Big U was the fact that this great vessel fell into the hands of incapable businessmen who didn't have a clue about using the ship's potential, beginning with Richard Hadley to Fred Mayer of commodore cruise line. Otherwise, the ship could been placed in the mothball reserve fleet.

This is a clear example of bad management at its worst without a clear business plan in mind for the ship, after the funds were in order.

I certainly hope that the Big U will not follow the SS Indy's footsteps. It would be a very grave mistake to see the SS United States go the Indian scrapyard. It's bad enough that the ship's interiors were gutted down in Turkey because of the stupid notion that the investors would receive funding to rebuild the ship, when the job could have been done in Germany. It would have left the ship's interiors intact, as well as the equipment.

I hope that someone does finally steps in and buys the vessel. Dispite its condition over the years of neglict, the Big U is too important of a ship to be sent either to the bottom of the ocean floor or to the scrappers.

I feel that Colin Veitch is a very bad businessman, like his predecessors before him. He had the power to convince Star's management about overhauling the SS Norway's engines before the explosion. So when the time came, it would have been sold quickly for their asking price, after they had recoupe the investment cost of overhauling the ship's powertrain.

Too bad they don't see things from that perspective.
I'm not going to argue that previous owners had no clear business plans on what to do with the SS US or not. But, it takes more than plans to get things done. It takes financing. While there have been plenty of owners willing to buy the SS US relatively cheaply over the years, few had the financial resources to complete their vision.
Just check out NCL's SEC filings at
http://www.sec.gov/Archives/edgar/data/1318742/00009501...-07-001914-index.htm

Specifically read
535199 EX-4.43 SHIPBUILDING CONTRACT FOR HULL NO. C33
or
543158 EX-4.44 SHIPBUILDING CONTRACT FOR HULL NO. D33
and
677867 EX-4.33 SYNDICATE LOAN FACILITY/HULL C33
or
653694 EX-4.34 SYNDICATE LOAN FACILITY/HULL D33

Just read two, not all four. You'll discover NCL has to pay the shipyard 100% of the building cost of a new ship upon delivery. You'll also discover cruise lines get loans to finance new ships, or "large capital projects" such as refurbishing a cruise ship. The banks expect 20% of the loan as a down payment. The banks also expect bi-annual payments on time for a period up to 10 years.
How do you think NCL raises the 20% down payment?
Check out one of these, there's many more supplemental deeds in the list.
105132 EX-4.25 SIXTH SUPPLEMENTAL DEED/NORWEGIAN DAWN
106371 EX-4.26 THIRD SUPPLEMENTAL DEED/NORWEGIAN SUN
219476 EX-4.27 SEVENTH SUPPLEMENTAL DEED/PRIDE OF AMERICA
110822 EX-4.31 THIRD SUPPLEMENTAL DEED/PRIDE OF HAWAI'I

You'll discover NCL refinances existing cruise ships to raise the down payments for capital projects. That's how NCL and other business interests finances expensive capital projects.

My point is it takes more than a businessman's or corporation's plans to accomplish these projects. It takes financial partners, especially banks. The banks not only want the down payment, they also expect collateral to guarantee their loans, and what they consider a sound business plan.

Assuming NCL could raise the down payment to refurbish a ship, be it either the SS US or SS Norway, and has a sound business plan; and if the refurbishment costs more than the value of the ship, is risking another ship as collateral worth the risk?
I believe you'll find refurbishing the damage SS Norway will cost more than the value of the repaired ship. I also believe, although I wish I didn't, that refurbishing the SS US is more expensive than it is worth too. The best things going for the SS US, in comparison to the SS Norway, is that it has had far less use, and since it had been previously stripped, it would be easier to modify to meet 2010 SOLAS rules; therefore it could remain in service long enough to outlast the term of any loan. But it still has that collateral problem.
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