FIJIAN Holdings Limited expects its first few years as the owner of South Sea Cruises to be challenging with the repayment of its $50million loan.
The company yesterday announced its acquisition from Marine Tourism Holdings (MTH) for $62.57million.
FHL chief executive Nouzab Fareed, however said they were positive it would largely benefit shareholders in the not too distant future.
As a first step in the acquisition, FHL divested its Blue Lagoon Cruises shares worth $12.57m to SSC.
Blue Lagoon Cruises has been undergoing restructure and last month FHL increased its shareholding in the company through a debt capitalisation process.
Yesterday, Mr Fareed confirmed a $10m initial payment with another $20m to be paid within 60 days.
The $20m balance would be paid over the next seven years. Mr Fareed confirmed the loan interest was 5 per cent.
MTH subsidiary, Cruise Whitsunday Pty Limited will manage SSC over the next five years. It would be paid an annual fee of $200,000 plus 0.9 per cent of gross revenue. SSC makes an average profit of $7m annually.
"The management agreement will allow FHL to maximise its return on investment in SSC," Mr Fareed sid.
"Over the initial eight year period, FHL will ensure that our people are well developed to continue the successful operations of SSC," Mr Fareed said.
He added that they had found a right partner in SCC, which had a good track record in the cruise industry.
FHL chairman, Iowane Naiveli said the private sector was investing more in the tourism industry.
While FHL was also moving in this direction, it also wanted to assist more small businesses, which may have opportunities from the acquisition.
SSC is the country's largest and most experience marine tourism operation in the country.
It operates four vessels out of Port Denarau providing resort transfers of tourist out of Denarau to the Mamanuca and Yasawa Group of islands.
The combined entity of SSC and Blue Lagoon will handle in excess of 210,000 passengers in the coming year.