Norwegian Cruise Line Sees ‘Substantial Doubt’ About Future, Warns Of Bankruptcy

Anna Kroupina, Open Jaw

Norwegian Cruise Line Holdings said it has “substantial doubt” about its ability to remain viable, as it tries to raise US$2 billion to keep it afloat through the coronavirus crisis, CNBC reports.

The coronavirus outbreak, “including its effect on the ability or desire of people to travel (including on cruises), is expected to continue to impact our results, operations, outlook, plans, goals, growth, reputation, cash flows, liquidity, demand for voyages and share price,” said Norwegian in a securities filing today. 

“These factors have raised substantial doubt about the company’s ability to continue as a going concern.”

To that end, Norwegian announced that it has secured a US$400 million investment from private equity firm L Catterton, but is seeking additional funds to maintain liquidity.

It announced it expects to report a loss of approximately US$1.93 billion for the quarter ended 31MAR. Norwegian said it had roughly US$6 billion in long-term debt obligations as of 31DEC. 

Norwegian is preparing to provide cash refunds for passengers whose cruises were cancelled. While it's also offering 125% future cruise credits, it said “approximately half of the guests who have had their voyages cancelled and who have contacted us have requested cash refunds.”

Even if guests accept the credit, the company warned of diminished future revenue when the company can resume sailing.

“We cannot predict when any of our ships will begin to sail again or when ports will reopen to our ships,” it said. “Moreover, even once travel advisories and restrictions are lifted, demand for cruises may remain weak for a significant length of time and we cannot predict if and when each brand will return to pre-outbreak demand or pricing.”

The news comes after competitor Carnival Cruise Line announced Monday that it hopes to gradually phase in some North American sailings on 1AUG.

Anna Kroupina

Anna Kroupina Journalist

Anna is OJ's newest member and she joins the team as a writer/reporter. She co-writes the daily news and covers events. Although she's new to the industry, pursuing a career path in travel/tourism has been a goal since her first family road trip to the Florida Keys sparked a desire to discover the world and this exhilarating, fast-paced industry.

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