NCLH moves to shore up fi­nances

Cruise Weekly - - Front Page -

NOR­WE­GIAN Cruise Line Hold­ings (NCLH) has ad­mit­ted the ef­fects of COVID-19 on the ship­yards where it has nine new­builds on or­der are likely to re­sult in po­ten­tially pro­longed de­lays to de­liv­er­ies, with the pan­demic “ex­pected to de­press de­mand for cruise va­ca­tions into the fore­see­able fu­ture”.

The down­beat brief was part of a fil­ing with the US Se­cu­ri­ties and Ex­change Com­mis­sion overnight, which also con­firmed a range of mea­sures to raise about US$2 bil­lion to boost the com­pany’s liq­uid­ity.

With­out rais­ing cash, the fi­nan­cial re­port cited “sub­stan­tial doubts about the com­pany’s abil­ity to con­tinue as a go­ing con­cern,” but also de­tailed share of­fer­ings, US$515 mil­lion in cap­i­tal ex­pen­di­ture re­duc­tions and other fi­nanc­ing mea­sures cur­rently be­ing fi­nalised.

Ad­di­tion­ally, NCLH is in ne­go­ti­a­tions to fur­ther re­duce spend­ing by US$170 mil­lion for new­build-re­lated pay­ments.

The com­pany said that as of 31 Mar it has US$1.8 bil­lion in ad­vanced ticket sales, in­clud­ing about US$850m for pre­vi­ously an­nounced voy­age can­cel­la­tions.

As of 24 Apr about half the guests on can­celled sail­ings with Nor­we­gian Cruise Line, Ocea­nia Cruises and Re­gent Sev­ern Seas Cruises have re­quested cash re­funds, the com­pany said.

“We con­tinue to take fu­ture book­ings for 2020, 2021 and 2022, and re­ceive new cus­tomer de­posits and fi­nal pay­ments on th­ese book­ings which will off­set a por­tion of the out­flow from ex­pected cash re­funds”.

The wide-rang­ing up­date also con­firmed the com­pany is fac­ing three class ac­tion law­suits that al­lege it made false and mis­lead­ing state­ments to the mar­ket and to its cus­tomers about COVID-19.

Shares in the com­pany slumped al­most 25% in trad­ing af­ter the an­nounce­ment was re­leased.

How­ever the up­date also con­firmed a US$400 mil­lion con­vert­ible note place­ment with pri­vate eq­uity firm L Cat­ter­ton, which said the cruise sec­tor had over­come nu­mer­ous chal­lenges in the past.

“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,” the fi­nancier said.

“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,” it added.

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