Cruise lines have been impacted financially by the coronavirus pandemic which has wreaked havoc on the global travel and tourism industry. Yesterday, Norwegian Cruise Line warned that it may have to seek bankruptcy after revealing that there is “substantial doubt” surrounding whether the company will be able to continue. The company said: “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.”
- Cruise: Over 70s won’t be discriminated against for future travel
In a securities filing with the US Securities and Exchange Commission (SEC), the cruise company said the issues they had faced trying to get emergency funding had in fact “raised substantial doubt about the company’s ability to continue as a going concern, as the company does not have sufficient liquidity to meet its obligations over the next 12 months”.
The company has since announced that a private equity fund called L Catterton had invested $400million (£323million) in NCL Corp which is a subsidiary of Norwegian Cruise Lines.
CEO of Norwegian Frank Del Rio said in a statement that he was pleased with the investment.
He said: “We are pleased to execute this agreement with L Catterton, the largest and most global consumer-focused private equity firm in the world.”
Scott Dahnke, the global co-chief executive of L Catterton seemed hopeful that the “resilient” cruise industry would survive.
He said: “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.”
WATCH: Top travel writers reveal why they love cruise holidays [INSIGHT]
TUI holidays: Travel firm cancels more holidays until June [UPDATE]
Cruise secrets: Cruise ship staff reveal their worst moments onboard [ANALYSIS]
Norwegian has also pledged two ships and two islands as collateral in a bid to stay afloat, according to the Financial Times.
The fundraising effort was critical to the company’s survival, which has seen half of its customers on cancelled voyages ask for cash refunds rather than credit.
The company managed to raise $400million (£323million) of fresh equity and over $1.4billion (£1.13billion) through two bond offerings.
Norwegian Cruise Line has also suspended all voyages until June 30 but is following the Centers for Disease Control and Prevention’s (CDC) no sail order.
The ruling last month by the CDC has placed a further extension on when cruises will be allowed to resume from North America.
Although many ships sail globally, the huge chunk of the world has resulted in disruption for travellers and financial strain on cruise companies.
The CDC has now lengthened its “no-sail ban” for cruises sailing from and docking at US ports saying it should stay in place for at least “100 days”.
Officials are allowed to recede the ban but as it stands that means the shutdown to cruising in the area will last well into July.
The ban can only be receded if the US government retracts its state of public health emergency.
Cruising has been one of the worst hit in the travel sector with most companies halting their operations in mid-March to help halt coronavirus.
Cruise line Royal Caribbean Cruises also reportedly warned that their future is also in jeopardy.
Since the start of the year, their shares have collapsed by around 75 percent.
Source: Read Full Article