"Aker said to be seeking buyer for F3
19/9/2008
A meltdown in relations between Aker Yards and NCL Corp. over costs for the F3 prototype has led the builder to seek buyers for the project, independent sources told Seatrade Insider.
Carnival Corp. & plc, Royal Caribbean Cruises Ltd. and MSC Cruises have been approached, according to the sources. The three cruise groups declined to comment, as did Aker Yards, and Apollo Management’s Steve Martinez referred to subsidiary NCL Corp.’s earlier statement declining comment on F3 commercial issues.

‘Aker/STX is all over the market to find a taker,’ one source told Seatrade Insider. Another source said that even if a buyer can be found for the project, ‘a lot of changes’ would be needed. The F3 blueprint has no main show lounge, for example, and the controversial ‘New Wave’ cabin design might not be acceptable to a new owner.

On Thursday an Aker Yards spokesman reiterated to Seatrade Insider that the F3 project remains under construction. The steel cutting took place in St. Nazaire last October, and the keel was laid on April 24.

Several independent sources said the builder and NCL Corp. are in a dispute over the costing of changes to the original specification. Aker Yards is allegedly putting the cost of these changes at €50m, according to one source, a figure Seatrade Insider has been unable to confirm. The source said NCL could not foresee operating the vessel profitably at the higher price resulting from the changes.

On announcing the contract in September 2006, NCL priced the first two F3 ships at €1.5bn. An option that was originally part of the deal expired last September.

At the time, Seatrade Insider asked NCL evp Andy Stuart why the option was let go. He said then: ‘Since we ordered the ship, we made quite a number of changes and we are not through the process of pricing those changes. We’re working through that on the first two.

‘Our desire is to extend the option when we’ve finalized the issues related to the first two,’ he continued. ‘Our wish is to extend it and ultimately to exercise it.’

In recent weeks, several sources described a standoff between attorneys representing Aker Yards and those working for NCL Corp. ‘Right now, it is a huge legal mess,’ said one person, who maintained the parties are trying to settle their differences in order to complete the ship. Others say the contract is canceled and the first F3 will not be completed for NCL.

Speaking in general terms about contractual issues, a broker noted there are clauses in newbuild contracts that give the buyer the right to cancel as a result of the yard’s default. Default circumstances may include the vessel not being built to specification, late delivery, the yard’s bankruptcy and other issues.

‘In that case the buyer will ask for the progress payments to be repaid, which are typically secured by a bank guarantee,’ he said.

If the buyer is unable to take delivery of a newbuild due to its own issues, the buyer may be liable for losses the yard might suffer as a result of the canceled contract. "

I was just thinking about who would be willing to buy a theater less ship and the only one I could think of was NCL then I remembered that they are the ones dropping out, lol.

[ 09-19-2008: Message edited by: DEIx15x8 ]

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Originally posted by mike sa:
From Cruise Community:

"Aker said to be seeking buyer for F3
19/9/2008
A meltdown in relations between Aker Yards and NCL Corp. over costs for the F3 prototype has led the builder to seek buyers for the project...

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I can't see any other cruise line taking over such a bad project without a significant redesign.

I can't believe that a $50 Million design change with a ship whose price tag is 3/4 billion is a make it or break it point. I think Apollo is looking for a reason to dump a bad design. I certainly can't blame them.

[ 09-19-2008: Message edited by: joe at travelpage ]

On topic: I thought about this much later but Apollo/SC decide that 50 Mill extra on a 3/4 billion ship will be a deal breaker (with possible revenue) but a penalty of $200 Mill (with no revenue) not be as bad?

There is something really fishy here. Maybe the "box ship" is much much worse than we all think or assume.

They promised to return the SS United States back to service, their NCL America project has stalled and the heavily promoted F3 project has been cancelled, it would seem. (Oh and they are scrapping a much loved ship).

quote:

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Originally posted by DEIx15x8:
I was just thinking about who would be willing to buy a theatre less ship...

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I assume the F3 had no 'main theatre' but a number of entertainment venues: not such a bad idea, was it?

[ 09-19-2008: Message edited by: Malcolm @ cruisepage ]

This news explains the lack of recent reveals.

The web site: www.f3.ncl.com/main.html is still up and running. Download the images quickly, they might be collectors items soon.

[ 09-20-2008: Message edited by: Malcolm @ cruisepage ]

Do you think that Star Cruises will takeover the F3s?

It seems that they can get the ships at a very low price. In addition, Most of Aisan passengers (Star's major customer) do not care about the cabin size, as well as whether there is a main showroom onboard. What they care is how big the casino is and how grand it is. I am sure that adding a huge casino is much more easier and cheaper than adding a main showroom on F3.

Also, since RCCL & Carnival have entered into the market, I think they must do something to maintain their competitive advantages in Asia.

[ 09-19-2008: Message edited by: HKcruises ]

Even if NCL pay out $200 million to get out of F3 the big looser here will be Aker who are already teetering - at least they do have SKX behind them now - a few weeks ago this could have pushed them over the brink.

F3 if bought by anyone else is going to be heavily redesigned and thus heavily delayed, Aker will hope they can bring other projects up date wise to cover it.

The only part of F3 set in stone is the mechanics (which are not revolutionary) and lower hull, the rest could be redesigned but will simply delay the project for about 12 months.

There are only 2 possibilites Carnival who unless they get some sort of major deal that makes it worth their while probably wont be interested and MSC whose own new build plan is already ambitious - could they absorb this new tonnage profitably given they have another 5 on order being delivered around the same time ?

It is not a case of getting rid of Veitch - its more how the hell he lasted so long.

[ 09-20-2008: Message edited by: Malcolm @ cruisepage ]

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Originally posted by Patsy:
Not surprised to hear this. They did a presentation on Norwegian Jade and showed the same renderings. Suffice to say we didn't stay. Oh to be a fly on the boardroom wall when they came to this decision.

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What was the reaction of NCL cruisers during that presentation - except leaving?

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Originally posted by FL_Cruiser64:
I think Apollo is looking for a reason to dump a bad design. I certainly can't blame them.

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Originally posted by Malcolm @ cruisepage:

I'm puzzled why you think she's a bad design? Not all aspects have even been revealed yet? We never saw an official external rendering?

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Originally posted by Neil Whitmore ( Bob ex P&O Cruises):
I would not think Apollo will be all that happy at this amount of money being lost.

I would think some heads could roll !

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Surely Apollo knew all about the F3's and ran their own profit projections *before* they invested in NCL. In fact I would imagine the F3's were one reason Apollo was interested in NCL to begin with. They obviously believed in the Freestyle concept and the F3's were/are the next evolution of Freestyle.

None of us know exactly what is really going on, but one thing is certain .... it's all sounds a little fishy! It's fairly unusual for a cruise line to walk away from a newbuild that they approved the design for, unless they are financially unstable. Based on what we know today (which is not a lot), I feel bad for Aker. No doubt they started building the ship that was contracted, and it's not exactly fair to start making major changes halfway through the game. Now they are left with a partially completed ship that no one will probably want. Personally, I feel NCL/Apollo should be held liable. Again, my comments are based on the limited information we know, and in reality things could be quite different. I just get the feeling someone is not playing by the rules, and that someone appears to be NCL/Apollo at the moment.

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Originally posted by Malcolm @ cruisepage:

I'm puzzled why you think she's a bad design? Not all aspects have even been revealed yet? We never saw an official external rendering?

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Some guy on CC who also works for NCL was at the keel laying and confirmed that the renderings floating around are the actual design.

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Originally posted by FL_Cruiser64:
[QB]

Some guy on CC who also works for NCL was at the keel laying and confirmed that the renderings floating around are the actual design.
QB]

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Maybe so, but we can no longer judge modern ships by there external appearance as they are all ugly. Some are just more so than others!