There are reportedly ongoing talks between Carnival Corporation and Saudi Arabia for the kingdom to purchase the cruise company’s ultra-luxury brand Seabourn.

The news was first reported by CNBC reporter Seema Moody, who tweeted the report on Tuesday, referring to unnamed sources.

Moody pointed out that Saudi Arabia, through its sovereign wealth fund, the Public Investment Fund, already owns 5% of Carnival Corporation as a whole.

Carnival in discussions to sell Seabourn brand to the Saudi sovereign wealth fund, per sources. Talks are still ongoing, no deal finalized as of yet. Comes <1 week after Carnival went to the debt market to raise $1b at 10% yield. Saudis currently own 5.1% stake in $CCL.

— Seema Mody (@seemacnbc) May 24, 2022

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The move, if confirmed, would come less than a week after Carnival Corporation took on a further $1 billion in debt as it seeks to secure cashflow amid the resumption of its full fleet of cruise ships.

Carnival Corporation has not denied the reports, with a spokesperson instead saying that the company will not “comment on rumor and speculation”.

Saudi Arabia has been investing prolifically in the cruise industry in recent years, not only through the acquisition of a stake in Carnival Corporation, but also through the opening up of the country to cruises, which has spurred major spending on cruise infrastructure.

Having already developed ports and having attracted cruise calls and homeporting operations, rumors have persisted in industry circles that the country’s public wealth fund desires a greater role in the cruise business.

When it chartered Silver Spirit for two months in mid-2020 as a test run ahead of the opening to cruise ships for the first time, there was speculation it might be seeking to acquire the brand from Royal Caribbean.

The country has also been shoring up its relationships with key executives in the industry, hiring officials from major cruise lines, including Lars Classen, the new CEO of Cruise Saudi, the cruise tourism promotion arm of the country’s travel and tourism agency.

Classen played a key role recently in starting The Ritz-Carlton Yacht Collection, and was previously the CEO of A-ROSA River Cruises and president of AIDA Cruises, Carnival Corporation’s German brand.

Seabourn Encore in Ras Al Khaimah in the UAE

The motives behind Carnival Corporation’s desire to sell its premier ultra-luxury brand, however, are unclear.

If the reports are confirmed, it would make little sense for Carnival Corporation to shed its luxury brand, while other cruise lines, such as MSC Cruises and Royal Caribbean, are in the process of launching their own in order to better compete.

While MSC is developing Explora Journeys, Royal Caribbean in 2018 purchased Silversea Cruises to be its luxury brand. Norwegian Cruise Line meanwhile owns Regent Seven Seas Cruises.

Carnival Corporation has also been investing significantly in the Seabourn brand, with two new ships on order for Seabourn’s expedition arm (Seabourn Venture and Seabourn Pursuit), and refit and refurbishments of the entire Seabourn fleet throughout 2018 and 2019.

The value of the acquisition remains unknown, according to CNBC, but when Royal Caribbean purchased Silversea, a comparable luxury cruise line, in 2018, it was valued at around $1 billion.