Workers near a cruise ship of the Norwegian Cruise Line which is in dry dock receiving hull maintenance and interior modernization work.
Gerald Julien | AFP | Getty Images
Norwegian Cruise Line said there is “substantial doubt” about its ability to continue as a “going concern” as the coronavirus pandemic wreaks havoc on the industry, the company said in a securities filing published Tuesday.
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,” the company said. “These factors have raised substantial doubt about the Company’s ability to continue as a going concern.”
The company also announced it expects to report a loss for the quarter ended March 31 and on the year.
Separately, the company announced Tuesday morning that L Catterton, a private equity fund, invested $400 million in NCL Corporation, a subsidiary of Norwegian.
Shares of the company fell more than 10% in premarket trading on the two announcements.
The coronavirus pandemic has brought the global travel industry, and the cruise industry in particular, to a standstill across the world. With tight credit markets and the economic toll of Covid-19 remaining unclear, Norwegian, the smallest of the three major publicly traded cruise companies, said it’s concerned about whether it will be able to find financing to help it weather a potentially prolonged situation without any revenue.
The company said it had roughly $6 billion in long-term debt obligations as of Dec. 31. In March, the company fully drew down an $875 million revolving credit facility and a separate $675 million revolving credit line. The latter is due to mature on March 4, 2021.
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