Norwegian Cruise Line raises $2B to avert bankruptcy

Financially troubled Norwegian Cruise Line Holdings Ltd. of Miami raised more than $2 billion from private investors to avert a possible trip to bankruptcy court, the company announced Wednesday.

In a Securities and Exchange Commission filing this week, the company warned investors that its business was in jeopardy after being forced to stop sailings due to the coronavirus pandemic.

But those concerns appear to have evaporated after a private equity firm stepped forward to commit $400 million, and other lenders and investors committed to provide another $2 billion through debt and stock purchases.

The money, the company said, provides a year’s worth of breathing room to operate as the economy attempts to shake off the threats posed by the pandemic. In mid-March, the industry came to a halt after a “no sail” order imposed by the federal Centers for Disease Control and Prevention.

“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,” Norwegian said Wednesday of the new money. “While this is not the company’s base case expectation, the company has taken a swift and proactive approach to protect its future given the significant uncertainty and unknown duration of the COVID-19 global pandemic.”

Norwegian operates Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises with a combined fleet of 28 ships that sail to more than 490 destinations worldwide.

All three lines had canceled cruises through June 30. Rival companies have announced tentative resumptions of sailings later in the summer. Carnival Cruise Line, for example, said it would start sailings out of PortMiami, Port Canaveral and Galveston, Texas, on Aug. 1.