NCLH Successfully Secures More Than $2 Billion of Additional Liquidity

Posted on 7 May, 2020 by Spacejunkie2

Norwegian Escape

Norwegian Cruise Line Holdings Ltd. (NCLH) has successfully secured over $2 billion of additional liquidity so it is “well-positioned” to weather the suspension of operations during the Covid-19 pandemic.

On May 5, the company announced the launch of a series of capital markets transactions, led by Goldman Sachs, to raise approximately $2 billion. The transaction has since been upsized to gross proceeds of $2.225 billion.

The transactions consisted of a $400 million public offering of common equity, $750 million exchangeable senior notes offering, $675 million senior secured notes offering and a $400 million private investment from global consumer-focused private equity firm L Catterton.

Contingent on completion of the transactions, the company said on May 6 that it expects to have approximately $3.5 billion of liquidity. The move came a day after NCLH said there were doubts about its ability as “a going concern.”

“This significantly strengthens the company’s financial position and liquidity runway and it now expects to be positioned to withstand well over 12 months of voyage suspensions in a potential downside scenario,” the company said in a news release. “When the transactions are completed, the additional liquidity alleviates management’s concern about the company’s ability to continue as a going concern for the next 12 months.”

A financial analyst report by Wedbush concurs. “What seems to be getting missed is that the company now has the cash in place to survive until mid-to-late-2021 even under a worst-case net cash outflow scenario,” the report said. “While we have been relatively bearish with respect to our assumptions as to when the industry is likely to open back up, much less go back to ‘normal’, the liquidity recently added by NCLH would seem to put the company in a sound position under the majority of plausible scenarios, no small feat given the gauntlet that they needed to run through in recent months to ensure the company’s survival.”

Princess Cruises abandons summer sailings

Posted on 7 May, 2020 by Spacejunkie2

Regal Princess Cruise - Ship Review - Photos & Departure Ports on ...

Worldwide coronavirus travel restrictions have forced Princess Cruises to abandon sailings for the remaining summer season.

The line, at the centre of controversy over Covid-19 outbreaks on a number of ships, has extended its pause in global operations from June 30 – the date new ship Enchanted Princess had been due to be named in Southampton.

The delivery of the new vessel was previously delayed with the Carnival Corporation brand now cancelling its five-ship programme in Europe this summer on Enchanted Princess, Regal Princess, Sky Princess, Crown Princess and Island Princess as part of the new wave of suspended sailings.

Other cruises cancelled until the end of the summer season include:

All remaining Alaska cruises on Emerald Princess and Ruby Princess

Summer Caribbean cruises and all Canada and New England cruises on Caribbean Princess and Sky Princess

Summer to autumn cruises departing from Japan on Diamond Princess

Australia-based cruises on Sapphire Princess and Sea Princess until August

July cruises sailing from Taiwan on Majestic Princess

Autumn cruises sailing to Hawaii and French Polynesia on Pacific Princess through to November

Princess originally announced a voluntary pause in operations for two months, affecting departures between March 12 and May 10. That was then extended in April through to June 30 before yesterday’s announcement.

The line made the “extremely difficult” decision to cancel select cruises through the end of the 2020 summer season due to reduced flight availability, the closure of cruise ports in regions around the world and “other factors impacting international travel”.

Princess pledged to protect travel agent commissions on bookings for cancelled cruises that were paid in full, “in recognition of the critical role they play in the cruise line’s business and success”.

Refunds are being offered but must be requested via an online form by June 15 or customers will receive refundable future cruise credits.

People who have booked and paid for the newly cancelled cruises have the option to receive a future cruise credit plus an additional bonus credit equal to 25% of the fare.

Princess will double the deposit, providing a refundable future cruise credit, for those who have not paid in full for the money currently on deposit plus a matching bonus FCC that can be used on any voyage until May 1, 2022.

The matching bonus FCC will not exceed the base cruise fare amount of the currently booked cruise and will have a minimum value of £100 per person.

President Jan Swartz said: “As the world is still preparing to resume travel, it is with much disappointment that we announce an extension of our pause of global ship operations and the cancellation of cruise holidays for our loyal guests.

“Among other disruptions, airlines have limited their flight availability and many popular cruise ports are closed.

“It saddens us to think about the impact on the livelihood of our teammates, business partners and the communities we visit.”

Norwegian Cruise Line Flags ‘Going Concern’ Over Ability to Stay Afloat

Posted on 6 May, 2020 by Spacejunkie2

Norwegian Jade photo credit Dave Jones

Norwegian Cruise Line Holdings Ltd., the world’s third-largest cruise operator, raised doubts about its ability to keep running as a business on Tuesday, the first in the sector to signal it may succumb to the coronavirus crisis.

The company’s shares slumped about 20% as it also launched a $1.6 billion offering of shares and bonds in a scramble to raise money, and announced a $400 million investment in a subsidiary from a private equity firm.

Norwegian Cruise and rivals Carnival Corp and Royal Caribbean Cruises have been among the most high-profile victims of the pandemic after deadly outbreaks on some cruise ships led to extended port quarantines in Japan and California.

Norwegian, which has suspended its sailings through June 30, has not yet announced a relaunch date. On Monday Carnival said it plans to resume some cruises beginning Aug. 1, pending continued efforts to coordinate with government officials.

The cruise industry was left out of a $2.3 trillion U.S. stimulus package for troubled companies as the major players are all incorporated outside the United States.

“COVID-19 has had, and is expected to continue to have, a significant impact on our financial condition and operations, which adversely affects our ability to obtain acceptable financing,” Norwegian said, also flagging substantial doubt about its ability to continue as a “going concern.”

The company said that as of April 24, advanced bookings for the remainder of the year were “meaningfully lower than the prior year, with pricing down mid-single digits.” Norwegian’s shares have lost almost 80% of their market value this year.

The Miami-headquartered company faces class-action lawsuits alleging that it made false and misleading statements to the market and customers about COVID-19 and its impact on its business – allegations it says are without merit.

In March, the Florida Attorney General announced an investigation related to Norwegian’s marketing to customers during the coronavirus outbreak, based on allegations it downplayed the severity and highly contagious nature of the virus in an effort to sell cruises.

Other attorneys general and governmental agencies are conducting similar investigations, according to the company.

Norwegian said it does not have sufficient liquidity to meet its obligations over the next 12 months.

Since the start of the crisis, the company has borrowed $1.55 billion under credit facilities. At the end of last year, it had about $6 billion of total long-term debt obligations and cash and cash equivalents of $252.9 million.

A subsidiary of Norwegian Cruise got a $400 million investment from consumer-focused private equity firm L Catterton on Tuesday. It had been in talks with several private equity firms.

Shares of Carnival were down 4.3% and shares of Royal Caribbean were down 5.6% on Tuesday. (Reporting by Helen Coster in New York and Ankur Banerjee and Nivedita Balu in Bengaluru; Editing by Saumyadeb Chakrabarty, Sweta Singh and Tom Brown)