Royal Caribbean’s Two Top Shareholders Terminate Agreement

Royal Caribbean’s Two Top Shareholders Terminate Agreement
By Mimi Kmet

Royal Caribbean Cruises Ltd. (RCCL) said it has been informed that its two largest shareholders, Cruise Associates and A Wilhelmsen AS, have terminated the agreement that exists between them. RCCL said it is not a party to the agreement and the move will have no material effect on its operations.

“This action is solely between the two shareholders and does not involve the company,” said Richard Fain, RCCL’s chairman and CEO. “We do not expect today's announcement to result in any change in the company's operations or strategic direction.”

Under the agreement, the two shareholders had agreed to vote their shares for the election as directors of four nominees of each shareholder. With the termination of the shareholders’ agreement, the two companies are no longer obliged to vote their shares in this manner.

All existing directors (including those nominated by Cruise Associates and A Wilhelmsen) are expected to continue to serve as directors in accordance with RCCL’s articles and by-laws, and no change in its board membership or management is contemplated.

RCCL’s directors will continue to be elected by a vote of its shareholders, except that vacancies are filled by the board for their unexpired terms. The directors are elected for staggered three-year terms. The only change is that, under the Shareholders' Agreement the two shareholders previously agreed to vote for each other's nominees. Now, they are free to vote as they wish.

RCCL said it understands that, with the termination of the shareholders' agreement, Cruise Associates plans to distribute its RCCL shares to its partners, who in turn may further transfer shares to their respective owners.

The company said there is no indication that the termination of the agreement is related to the recent turmoil in the financial markets or to the recent drop in RCCL's share price. It also will not have any effect on RCCL’s loans or debt instruments, and there will be no impact to the company's tax position.