given Norwegian Cruise Line (which operates The Dreamward ), the former Kloster Cruise company, much chance of survival. It was beset by a stack of seemingly unsurmountable problems and was often written off as having a future only in the corporate graveyard.

How times change. It has now completed a financial restructuring, streamlined from operating three brand names down to just one, cutting operational complexity and generating economies of scale. As a result, the company's shares are now being tipped as a potentially lucrative investment, particularly should NCL's renewed buoyancy lead to a takeover bid being launched for the company.

As one leading Oslo broker puts it: "All these major fundamental changes imply that NCL, after several years of financial struggle can again take its place as one of the leading players in the cruise industry, with a balance sheet which allows it to expand that operations and benefit from large scale advantages.'' The old Kloster Cruise and its former holding company Vard was blighted by a string of problems; old and unsuitable vessels, higher costs than its competitors such as Carnival and Royal Caribbean, confused marketing, and a rapidly deteriorating balance sheet.

The transformation has been such that the broker, who declined to be named, commented: "Given the strong potential of increased earnings within NCL, and the fact that the new and streamlined company could be a takeover target we believe the shares have the potential to double from current levels.'' Key results from the restructuring have been reduced costs and a younger fleet. Shoreside operating costs have fallen from $154 million in 1993 to $98 million this year and should fall further to $95 million in 1997. Meanwhile, net debt has been slashed from almost $1 billion at the end of 1993 to $726 million in 1995 and down further to $576 million after the last stage of the refinancing.

Despite these changes, NCL's fleet still has about the same number of berths as previously, but it had dramatically lowered the average age of its vessels from around 13 in 1995 to around eight years, or only five years if you exclude the SS Norway , which has been recently undergoing a refit.

Central to the group's remoulding has been a management programme labelled "100 Improvements''. It included everything from major marketing initiatives to smaller measures designed to add credibility.

Already the group's product and brand name recognition has been improved, as recent surveys among cruise industry travel agents show more recommendations for NCL cruises. The improvements have been supported by a more aggressive and focused marketing campaign which won an advertising award last year.

Among the smaller items that have been improved have been fruit bowls in all rooms on departure, towels by the pool-side, a bistro on all ships and free 24-hour room service. "These improvements cost NCL approximately $6 per day, but that cost has been taken from cost cutting in other areas which will not be noticed by passengers,'' claimed one company analyst.

Abolition of the Royal Cruise Line brand meant the closure of the shore-side operations in San Francisco and Piraeus. The vessels Crown Odyssey (under the name Norwegian Crown ), Royal and Star Odyssey have all been transferred from RCL to NCL.

Ship operating costs were reduced, while Greek officers and crew are being replaced with cheaper alternatives.

The next stage could an expansion of the group's capacity with eventual new vessel additions.

Report from Lloyd's List THE DREAMWARD -- The ship is now operated by the Norwegian Cruise Line.