Press release | Third quarter results 2023 and comprehensive recapitalisation Transaction announcement

12 Dec 2023 08:00 CET

Hurtigruten Group announces its comprehensive recapitalisation Transaction

Hurtigruten Group AS (the “Company”, and together with its subsidiaries, the
“Group”) is pleased to announce that it has agreed, with its senior lenders and
shareholders, a comprehensive recapitalisation transaction (the “Transaction”)
which will significantly strengthen the balance sheet and serve as an important
step towards enabling the Group to implement its strategic objective of
delivering the legal and operational separation of the business into the ‘HX’
expeditions business with the largest expeditions fleet in the world (“HX”) and
its prestigious Norwegian cruise business (“Hurtigruten”).

Key highlights of the Transaction include:

1. the injection of EUR 185 million of new liquidity into the Group;

2. deleveraging the operating group by reinstating facilities under the senior
term facilities agreement and the senior note facility agreement (together the
“Senior Facilities”) into (i) new opco facilities with the Company, and (ii) a
new holdco facility with the immediate holding company of the Company (the “New
Facilities”);

3. providing consent by the creditors of the Senior Facilities to implement the
business separation of the HX and the Hurtigruten brands of the Group in
accordance with the terms of the New Facilities in order to position the Group
for future strategic alternatives.

Shareholder Support

As support for the Transaction, the Group’s shareholders have agreed to, among
other things, restructure their shareholder loan facilities (in an aggregate
principal amount of €143 million) which will be subordinated to the Senior
Facilities and have an extended maturity profile to provide further support for
the business.

Third quarter results

The Group continues to see improvement in financial performance in Q3 2023,
focus is on building occupancy to support earnings recovery and growth. Total
revenue in third quarter 2023 was EUR 195 million for Group, in line with the
third quarter of 2022.

The Group had positive EBITDA of EUR 36.8 million in the third quarter of 2023
compared to EUR 18.4 million in the same period last year, an increase of EUR
18.4 million. This increased EBITDA is driven by improved financial performance
for Hurtigruten, lower ship operating expenses and lower selling, general and
administrative (SG&A) expenses, offset by an increase in direct costs
attributable to inflation.

Operational cash flow for Group in the quarter was positive EUR 18.0 million
compared to outflows of EUR 6.8 million in the same quarter last year driven by
higher EBITDA and lower working capital outflow.

To strengthen Group’s financial flexibility, the ultimate shareholders of the
Group provided further funding totaling EUR 70 million during the quarter of
which EUR 45 million was drawn as of end of Q3 2023. As of end of Q3 2023 Group
had EUR 52 million of available free liquidity.

The Group continues to see a positive booking momentum and effect of the
strategic changes made by the Group. As of 30th of November 2023, HRN and HX had
EUR 329 million in pre-booked revenue for 2024 with good momentum across all key
markets, with the 30-day average and 90-day average bookings up 49% and 51%
respectively compared to the same time last year.

The Lock-up Agreement

As at 11-December-2023, the Transaction has the support of entities holding,
directly or indirectly, over 70% of the total commitments under the Senior
Facilities. In connection with the Transaction, the Group also obtained a waiver
of the minimum liquidity covenant under the Senior Facilities for the month
ending November 2023 on 6 December 2023.

Key terms of the Lock-up Agreement include:

1. an early-bird fee of 0.25% to all creditors under the Senior Facilities who
accede to the Lock-up Agreement by 28-December-2023; and

2. a consent fee of 0.25% to all creditors under the Senior Facilities who
accede to the Lock-up Agreement,

in each case payable in kind through the issuance of additional opco senior
facility commitments on successful implementation of the Transaction.

The Company has engaged Kroll Issuer Services Limited as the information agent
and invites all creditors under the Senior Facilities who wish to access further
information relating to the Transaction and the Lock-Up Agreement to visit:
https://deals.is.kroll.com/hurtigruten.  

Implementation of the Transaction

The Company intends to implement the Transaction on a consensual basis or, if a
fully consensual route is not possible, through an English law scheme of
arrangement under the Companies Act 2006.

For further information, please contact:

Investor Relations team:  InvestorRelations@hurtigruten.com

Lock-up Agreement:

Information Agent: hurtigruten@is.kroll.com

More information:
Access the news on Oslo Bors NewsWeb site

606304_Hurtigruten Group AS Q3_23_report.pdf
606304_Q3 2023_Earnings call presentation Hurtigruten Group.pdf