By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Mediterranean Shipping Company (MSC) is “joining” the Grand Bahama Shipyard via a joint venture with the latter’s two existing cruise line shareholders, it was confirmed last night.

Dave Skentelbery, the Shipyard’s chief executive, in a statement to Tribune Business confirmed that the global global cargo shipping giant - which also owns a fast-expanding cruise business - is set to buy-in to the Grand Bahama-based operation once all necessary government and regulatory approvals are received.

“Subject to pending regulatory and government approvals, we are pleased to have MSC Cruises join the Grand Bahama Shipyard through a joint venture agreement with Carnival Corporation and Royal Caribbean Group,” he said. “We look forward to working with the Government on a path way forward.”

The Shipyard’s statement came in response to Tribune Business inquiries after this newspaper learned MSC was in negotiations to buy into the Grand Bahama Shipyard as the latter prepares to bring its $600m investment in two new docks to fruition.

Multiple well-placed contacts, speaking on condition of anonymity, confirmed that the global cargo shipping giant - which generated $36.2bn in profits in 2022 - was looking to invest in the Grand Bahama-based facility although they gave different explanations for how any deal would be structured.

Tribune Business was initially informed that MSC was in talks to acquire the 20 percent equity ownership interest that the Grand Bahama Port Authority’s (GBPA) affiliate, Port Group Ltd, holds in the Shipyard. Apart from Port Group Ltd, the other two shareholders are Carnival and Royal Caribbean, both of whom own 40 percent each, and it was suggested that MSC would acquire a portion of their interests, too.

The resulting ownership structure would see Grand Bahama Shipyard’s ownership split evenly between Carnival, Royal Caribbean and MSC, with each owning one-third of the equity. However, this newspaper was subsequently told this description of the deal being negotiated is incorrect, and that Port Group Ltd is not selling its stake, although it was confirmed that MSC is indeed seeking to buy into the Shipyard.

Instead, it was suggested that MSC would provide financing or a capital injection into the Shipyard. And, in return, it would have significant control and say over all key decisions made by and involving the Shipyard. “I heard MSC is buying into the Shipyard,” one contact said, “but they bought it just like on the paper. They injected some cash into it, and no decision can be made without going to them.”

All parties involved are signed-up to non-disclosure agreements (NDAs) over the Shipyard deal. The Shipyard’s statement last night did not detail how MSC’s investment will be structured, and how its ownership may change, although it appeared to confirm it does not involve Port Group Ltd’s stake and is instead a partnership with its two cruise competitors.

One source, well-placed to know of developments, went completely silent when Tribune Business directly asked whether MSC is buying into the Shipyard. They eventually said: “I can neither confirm nor deny”, and: “You’re not far off the mark with any of this.”

The potential Shipyard deal has emerged just as MSC Cruises, the shipping conglomerate’s cruise group, is becoming increasingly active in The Bahamas and wider Caribbean region. It last week unveiled what it described as the world’s largest cruise terminal at the Port of Miami, spanning more than 492,000 square feet and capable of processing up to 36,000 passengers daily and handling up to three ships at once.

Some four ships will be sailing from that terminal this year to destinations including The Bahamas and MSC Cruises’ private island of Ocean Cay. And MSC is today hosting an event on Ocean Cay related to its foundation that is due to be attended by around 200 persons, including Prime Minister Philip Davis KC and his entire Cabinet plus senior GBPA officials.

MSC has also been deeply involved in plans to redevelop Freeport harbour in partnership with Royal Caribbean and ITM Group. And Rupert Hayward, a GBPA director, confirmed earlier this year that the two cruise companies are teaming with the Freeport Harbour Company to redevelop Billy Cay into a new cruise port and amusement park.

Teaming with Carnival and Royal Caribbean, and investing in the Shipyard, would make sense for MSC as it would enable it to influence when its vessels could access the facility for repairs and refits rather than have its two cruise rivals determine the schedule. And its involvement, and potential investment, will help ease and share the burden of financing the Shipyard’s new multi-million docks.

Grand Bahama Shipyard has previously said it is aiming to more than triple its annual turnover to $250m within five years after its $600m investment in the two new docks left it “poised to revolutionise the landscape of ship repair”.

The first, smaller dock, will have the capacity to lift ships weighing up to 93,500 tonnes and accommodate those up to 357.39 metres long and is due to arrive in Freeport in the fourth quarter and dock its first ship on New Year’s Day 2026.  The other “mega dock” will be able to lift 130,000 tonnes and accommodate ships up to 413.96 metres long. Set to arrive in Freeport in the 2026 third quarter, it will be in service before year-end 2026.

MSC’s Grand Bahama interests also extend beyond the Shipyard. For Terminal Investment Ltd, its port operations and infrastructure arm, is part of the consortium alongside Blackrock, the world’s largest asset manager, that is seeking to acquire CK Hutchison’s non-Chinese port interests which include majority ownership of the Freeport Container Port and a 50 percent stake in Freeport Harbour Company.

That deal, though, has been delayed after running into political headwinds from Beijing amid the escalating retaliatory tit-for-tat tariff war between China and the US, which yesterday saw the latter raise tariffs on Chinese imports into the US to 125 percent.

There have also been suggestions that MSC is in talks with the St George family to acquire its 50 percent interest in the GBPA and Port Group Ltd, although this could not be confirmed before press time. And this newspaper has also been unable to corroborate whether any such negotiations involve the Hayward family, which holds the remaining 50 percent.

The GBPA and the Government are presently in arbitration over the latter’s demand that Freeport’s quasi-governmental authority pay $357m to reimburse it for expenses allegedly incurred in providing public services that exceed tax revenues generated by the city. The Government is thus arguing that the GBPA is liable to pay the difference as required by the Hawksbill Creek Agreement.