Star Cruises to sell vessel for $110m,

[Jason]

Hong Kong (Bloomberg) – Star Cruises Ltd., the world’s third- largest cruise line operator, said it will sell a ship for $110 million and lease it back. The company plans to use the proceeds from the sale to repay debt.The cruise operator will sell the Norwegian Crown, built in 1988, to Olsen Cruise Lines Pte, a venture equally owned by Ganger Rolf A/S and Bonheur ASA, it said in a statement today.

The Hong Kong-based company will lease the ship back for $30,000 a day for 14 months starting in August.

Star Cruises, which has a loan on the vessel, said it will make a gain of between $15 million and $17 million from the sale. The company, which has added three new ships since 2005, plans to use the proceeds to pay down debt, it said.

The cruise line, like its larger rivals Royal Caribbean Cruises Ltd. and Carnival Corp., is seeing its profit slump as fuel prices surge. The company made a loss of $35.05 million in the three months ended March 31, from a profit of $4.4 million a year earlier. Fuel accounted for 19 percent of its first-quarter operating expenses, up from 15 percent a year earlier.

The company’s shares rose 4.4 percent to HK$1.42 in Hong Kong on June 2. Its Singapore-traded stock rose 5.1 percent to 20.5 US cents on the same day. Ganger Rolf and Bonheur are both listed in Oslo.

Star Cruises has 22 vessels in service or on order, it said.