(Bloomberg) -- TDR Capital LLP risks losing control of Norwegian cruise line operator Hurtigruten Group AS if the company fails to refinance its bond due next year by the end of August, according to people familiar with the matter.
Under the terms of a recapitalization agreed with its creditors earlier this year, Hurtigruten committed to either refinance or extend the maturity of its bonds due in February 2025 by Aug. 31, the people said, asking not to be named discussing private information. Failure to do so would allow lenders to take a 51% stake in the company.
While negotiations between the company and bondholders are still ongoing, it’s possible they won’t reach an agreement by the end of August, the people said. Hurtigruten also has to amortize about €20 million ($21.7 million) of that bond by August 26 to avoid an event of default, some of the people familiar said.
A TDR representative declined to comment, while a spokesperson for Hurtigruten didn’t reply to a request for comment.
Handing over control to lenders would mark a significant shift for TDR, which first invested in the company in 2014 and subsequently stepped in multiple times to help it recover from the impact of the pandemic. Since 2021, the private equity firm has provided shareholder debt facilities of about €375 million, according to Bloomberg estimates based on Hurtigruten’s disclosures.
Since 2021, the company has been working to separate its expedition business from its domestic transport operations, with a full split expected to happen in 2025.
Performance has lagged in recent years. Bookings for its Norwegian business came in at 89% of the amount budgeted for at the end of June, while that figure was 87% for the expeditions arm, some of the people familiar said.
Still, in the first quarter the group reported an improvement in earnings before interest, taxes, depreciation, and amortization, as well as “increased momentum in recent booking trends” for 2025.
--With assistance from Libby Cherry.
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