Norwegian Cruise Line Holdings, the world’s third-largest cruise operator, has warned its investors that it doesn't have enough cash to cover its financial commitments over the next 12 months.
“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 to fund resulting reductions in cash from operations,” NCL said in a statement.
The news comes as one of NCL’s biggest rivals, Carnival, said this week that it is taking first steps toward reopening operations later this summer.
NCLH’s announcement caused shares in the company to sell off – shares dropped about 9 per cent before the opening bell on Tuesday (May 5th) as the company launched an emergency stock and bond sale to raise $1.6 billion USD to help keep the company active.
The company said Tuesday that it has tentatively raised $400 million USD from L Catterton, a private equity group based in Connecticut.
“We are pleased to execute this agreement with L Catterton, the largest and most global consumer-focused private equity firm in the world,” Norwegian CEO Frank Del Rio said in a statement.
Scott Dahnke, Global co-CEO of L Catterton, added:
“The cruise industry has been very resilient over a long period of time, driven by strong secular tailwinds and a high level of guest satisfaction. People enjoy cruising, with many guests taking multiple voyages over time. The industry has overcome numerous challenges in the past, and we expect that the industry will rebound and prosper with even further enhancements to their already rigorous health and safety protocols in place in the future. Within the industry, the three brands of Norwegian Cruise Line Holdings have carved out distinctive leadership positions in their respective markets, guided capably by Frank Del Rio and his exceptional management team. We couldn’t be more excited to support the team at Norwegian as they work through this suspension of travel and begin to commence operations after their voluntary suspension of voyages.”
NCLH is the parent company of NCL, Oceania Cruises and Regent Seven Seas Cruises.
Meanwhile, Carnival plans to phase in a resumption of its North American service starting this summer.
As of Aug. 1st, the company will use a total of eight ships from Miami, Port Canaveral and Galveston. In connection with this plan, Carnival's pause in operations will be extended in all other North American and Australian markets through Aug. 31st.
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