Nowegian Cruise Line is set to benefit from a moneyspinning new investment deal thanks to private equity group Apollo Management.

The cruise liner company, which regularly docks its ships in Bermuda - one of which the Norwegian Crown ran aground as it approached Hamilton last summer, will reap the financial rewards after Apollo made a $1 billion cash equity investment in their parent company NCL Corporation Ltd.

Apollo has more than $33bn of assets under management and already have significant investments in the cruise, leisure and entertainment sectors, including Vail Resorts, Oceania Cruises, Sirius Satelitte Radio and AMC Entertainment.

The new investment comes in the form of common stock alongside NCL's existing sole shareholder, Star Cruises, and is designed to strengthen NCL's balance sheet and its ability for the continued expansion of the youngest fleet in the industry, and to evolve further the company's Freestyle Cruising concept first introduced in 2000.

"To have an investment on this scale by one of the very top names in the private equity world is a huge vote of confidence in the new NCL we have created since Star Cruises became the owner in 2000," said NCL Corporation president and CEO Colin Veitch.

Steve Martinez, partner at Apollo Management also welcomed the move.

He said: "We are very excited to be forming this partnership with Star Cruises and the existing management team of NCL.

"Our investment will help NCL complete its transition into the youngest fleet in the cruise history, with a truly original next generation project with its F3 concept ships.

"We believe the NCL brand has significant growth potential over many years to come."

Under the terms of the proposed investment, which includes an agreement for additional future distributions to be made directly by NCL to Star, Apollo will become 50 percent owner of NCL and will name a majority of the NCL board with certain consent rights retained by Star.

Star will also keep all of its existing stock in NCL and will continue to own the other 50 percent of the recapitalised company.

Star Cruises chairman and CEO Tan Sri Lim said he was very excited about the opportunities that lie ahead.

"Apollo's significant financial commitment in NCL's common stock means we have an equal partner who believes in the business as much as we do," he said.

"This is a powerful validation of what we have achieved so far and of our vision for the future.

"It is also truly the start of the next - and most exciting - chapter for this great company.

Furthermore the proceeds of the Apollo investment will be used to repay existing NCL debt and to increase the liquidity available to fund the continuation of the dramatic new building programme that has already seen the introduction of eight purpose-built Freestyle Cruising ships to the fleet in the space of six years. The fleet currently stands at 19,740 berths, with another 15,000 berths under construction and under option, including the Norwegian Gem, which is due for delivery at the start of October.

Apollo and Star have also entered into a sub-agreement over NCL's US flagged Hawaii operations under the NCL America brand, providing for deferred consideration to be paid to Star NCLA in the future.

Taken together with the pre-money valuation implied by Apollo's $1bn payment for the expanded equity, this part of the transaction implies a total enterprise valuation of NCL of approximately $4bn.

The transaction is expected to be completed in the early fourth quarter of 2007.