Saga PLC (LSE:SAGA) has confirmed plans to unlock finance through new arrangements in its cruise ship business.
Responding to media speculation on Friday, the heavily indebted travel and insurance firm said partnerships are being explored for the division, which Saga said is operating close to capacity due to high demand.
"The board is exploring opportunities to optimise Saga's operational and strategic position in cruise,” the company said in a statement.
“It has concluded that a partnership arrangement [...] would be consistent with group strategy to move to a capital-light business model to support further growth and crystalise value, reduce debt and enhance long-term returns for shareholders.”
Sky News reported on Thursday that funding arrangements are being explored ahead of a £150 million bond repayment due in May and to tackle net debt of over £650 million.
This could include the sale and leasing back of Saga’s Spirit of Adventure and Spirit of Discovery cruise ships, according to the report.
Plans could also see a stake sold in the business or operations being outsourced under a licensing deal, Sky said.
“No decision has yet been made and there can be no certainty that any partnership agreement will occur,” Saga added on Friday.
“A further announcement will be made in due course, as appropriate.”