Carnival, Iberojet to Form Spanish Cruise Operation

Carnival Corporation and Orizonia Corporacion, Spain’s largest travel company which operates its own cruise fleet under its Iberojet division, have signed a letter of intent to form a joint venture to operate and expand the existing Iberojet Cruise brand in Spain.

Iberojet Cruises operates two modern cruise ships, the Grand Voyager, built in 2000, and the Grand Mistral, constructed in 1999, which represent the newest ships in the contemporary Spanish cruise market. The new joint venture would eventually be comprised of a multi-ship fleet serving the rapidly expanding Spanish vacation sector.

Under the proposed agreement, the two existing vessels would be transferred to the joint venture company. The intention is to grow that fleet over the next several years through the acquisition of existing tonnage from Carnival Corporation & plc’s current fleet.

Under the proposed transaction, the Iberojet cruise business being contributed to the joint venture company will be valued at €320 million, with €180 million in debt, representing a net capital value of €140 million. Carnival will own 75 percent of the joint venture with Iberojet owning 25 percent.

Carnival expects the transaction to be neutral to earnings on an annualized basis for the 12-month period following the transaction closing. The transaction is expected to close in the second quarter of 2007, pending approval of both companies’ boards of directors, all necessary regulatory approvals, customary due diligence and execution of definitive agreements.