Swan Hellenic cut ties with sanctioned owners, arranging fresh equity

'The company is not under sanctions because it broke ties with any Russian owners,' he said. Now, the only Vodohod parties with interests in Swan are EU citizens.

Swan Hellenic is also in the process of buying SH Minerva from the Russian-owned leasing company GTLK Europe, which is under EU sanctions. And it will be acquiring directly from Helsinki Shipyard SH Vega, nearing completion for delivery this month, and the 2023 newbuild SH Diana, according to Zito.

Equity talks

At the same time, Swan Hellenic is 'actively and successfully in discussions with various financial parties,' he said, adding that news is expected to be forthcoming.

As for Helsinki Shipyard, in March acting CEO Simo Rastas said neither the yard, nor its board members or its owner, Algador Holdings of Cyprus, are subject to sanctions, adding: 'Helsinki Shipyard is a Finnish company and has Finnish management.'

SH Vega to be delivered this month

SH Vega is currently undergoing sea trials and, upon delivery in late May, will be 'better completed than Minerva was when it left the yard,' Zito said. After some additional outfitting, SH Vega is scheduled to be named July 11 in Helsinki, and is due to begin revenue service July 20 from Tromsø, Norway, on an inaugural season of Arctic itineraries that include Svalbard, Iceland, Greenland, Canada and the Northwest Passage.

'The market is still soft. Americans are not flying over to Europe. Europeans are still hesitant [about traveling]. We are slowly filling the ship before the summer season,' Zito said.

Meanwhile, since completing what Zito called a successful and fully booked 2021/22 Antarctica season, SH Minerva has been waiting off Montevideo, Uruguay, for the acquisition by Swan Hellenic to close.

The ship had been scheuled to sail up the Pacific Coast to Alaska and the Aleutian Islands, the Russian Far East and Japan. With Russia's invasion of Ukraine, Russian ports were dropped and Japan still has not opened to cruise ships. 'Celtic discovery' itineraries around the UK were crafted as a replacement, but sanctions would have kept the Russian-owned SH Minerva from calling there.

Awaiting approval for SH Minerva acquisition

Even before the sanctions, Swan Hellenic in early March had exercised its purchase option for SH Minerva, on bareboat charter from GTLK Europe, a huge Russian-owned leasing company with legions of ships and airplanes. Since GTLK is based in Dublin, the Irish government needs to authorize the transaction.

Buying a sanctioned asset is a lengthy process, and Zito said 'we are over the major hurdles and now have a green light in principle' but no definitive date for the transaction to close. He hopes for completion by summer or, at the very latest, by September, before the 2022/23 Antarctica season.

Newbuilds to be directly acquired from Helsinki Shipyard

Newbuild SH Vega which, similar to SH Minerva was going to be owned upon delivery by GTLK and chartered to Swan, will now be acquired directly from Helsinki Shipyard by Swan. Zito said the company has made an installment payment and, 'On delivery, we will fully pay for the ship so it will not be under sanctions, the same with the third (SH Diana).'

Swan Hellenic has faced exceptional challenges.

Zito revived the brand in 2020 with Vodohod, Russia's largest river cruise company, as its major shareholder. Swan forged ahead during the global pandemic shutdown and SH Minerva was delivered in late 2021, managing to operate an Antarctica season, which some companies were not able to do. Then came Russia's invasion of Ukraine.

'We had to change the itineraries 20 times. It's been a nightmare,' Zito said.

But, now, with the ownership restructuring and a refinancing under way, things are looking brighter. Zito hopes to share good news in the not-too-distant future.