Cruise line files for bankruptcy reorganization
The fate of three former Royal Caribbean ships is unclear after the Spanish cruise line operating them filed for bankruptcy reorganization because of the coronavirus pandemic.
Pullmantur Cruises, which is 49% owned by Royal Caribbean and 51% owned by Cruises Investment Holding, filed to reorganize, claiming insolvency under Spanish law as the line is unable to pay its debts.
It’s been a lingering question whether coronavirus would bring down cruise lines – given the industry came to a halt after COVID-19 ravaged several ships.
And now, a small cruise line has yielded to the virus.
“Despite the great progress Pullmantur Cruceros made in 2019, the economic headwinds of the COVID-19 pandemic have unfortunately made the brand’s continued operation untenable without reorganization,” Jonathon Fishman, a spokesperson for Royal Caribbean, told USA TODAY.
Pullmantur’s board of directors made the call that the filings, made under Spanish law, were necessary due to the pandemic.
The cruise line has canceled scheduled sailings on its three-ship fleet, which includes the Horizon, the Sovereign and Monarch, through Nov. 15. In an announcement on its website, Royal Caribbean Group said that all guests who had been booked on a Pullmantur itinerary have the option to reschedule on other Royal Caribbean cruise lines, including Royal Caribbean International and Celebrity Cruises.
As far as how reorganization will look, plans have not yet been made clear.
“We’re going through the process right now,” Fishman said.
Typically, reorganization includes changing the capital structure, altering debt payments and selling assets, among other steps, Jaime Katz, senior equity analyst for Morningstar told USA TODAY.