NCL likely to file for bankrupcy protection

[VermeulT]

Norwegian Cruise Line Holdings Ltd., amended a filing with the Securities and Exchange Commission on Tuesday citing financial losses due to coronavirus mean there is “substantial doubt” the company can “continue as a going concern,” raising the specter of bankruptcy.

 

 

https://www.orlandosentinel.com/coronavirus/jobs-economy/os-bz-norwegian-cruise-line-holdings-sec-filing-concern-20200505-p5l5wcqz2je67bbbsnvxwcsqym-story.html

 

 

HAL/ CCL is in better shape but .....

Edited May 5, 2020 by VermeulT

[Krazy Kruizers]

I am not surprised about this.

 

Wonder who will be next?

[Himself]

This is bound to happen.   Very sad.  

[AlanF65]

Actually, the 8-k filing  (found here http://www.nclhltdinvestor.com/node/12861/html) says if a bunch of other thing don't happen.

They have started to secure financing and required by one of the lenders to get another billion somewhere else. The also raised 350M in a stock offering so today they secured 750M after the 8-k filing.

More  here

https://finance.yahoo.com/news/ncl-corporation-ltd-announces-proposed-125004672.html.

They were granted a 12 month holiday on ship debt from Germany, now working with Italy for the same debt  holiday.

 

[travelhound]

58 minutes ago, VermeulT said:

 

 

HAL/ CCL is in better shape but .....

HAL and CCL will probably benefit from this.  The cruise industry is overcrowded, and the thinning of the herd will make it better for the lines that survive this crisis.  Right now, CCL has the most liquidity in the industry and will likely survive. 

[RocketMan275]

1 hour ago, VermeulT said:

Norwegian Cruise Line Holdings Ltd., amended a filing with the Securities and Exchange Commission on Tuesday citing financial losses due to coronavirus mean there is “substantial doubt” the company can “continue as a going concern,” raising the specter of bankruptcy.

 

 

https://www.orlandosentinel.com/coronavirus/jobs-economy/os-bz-norwegian-cruise-line-holdings-sec-filing-concern-20200505-p5l5wcqz2je67bbbsnvxwcsqym-story.html

 

 

HAL/ CCL is in better shape but .....

"Substantial doubt" isn't the same thing as likely.

These are typical lawyer words inserted so that NCL can't be held at fault if they do go bankrupt.

[VermeulT]

And bankruptcy protection doesn't mean they're for sure gone.  It just means they need time to catch their breath.

[Paulinda]

When the cruise industry starts up again be prepared to pay much more for your cabin.  Alas, our cruising days may be over.  

[CRUZBUDS]

It will be sad if NCL does not survive these trying times.   I speak as someone who hates NCL. 

 

Strike one -- I never forgave them for being the first main stream line to ban passengers from bring their own alcohol aboard.  When we started cruising it was fine to bring your own.  On our first Carnival cruise in 1987 you could buy what you wanted in the onboard store.  There were two prices on on all of the bottles, one was about what we paid in CA grocery stores, the other price was duty free and cheaper.  If you paid the grocery store, price your were welcome to take it back to your cabin.  

 

Strike two -- after San Diego lost most of their cruises maybe 6 to 8 yeas ago, NCL was going to do several 11 day Mexico's from San Diego.  We booked and figured, let bygones be bygones.  Three or four months prior to the cruise they canceled them.  

 

Even so, losing any competition in the industry is not good for cruisers.  

 

 

 

   

[KirkNC]

The title of this thread is very misleading.  You need to actually read the 8-k and not rely on the spin the media puts on this.  The truth is that NCL is in the process of raising $2.0 billion and as one of the thirty risks they are required to disclosure in their filing they says:

 

• our ability to raise sufficient capital and/or take other actions to improve our liquidity position or otherwise meet our liquidity requirements that are sufficient to eliminate the substantial doubt about our ability to continue as a going concern;

 

Well no kidding, if we run out of money, we are out of business.  Boilerplate disclosure.  Surprised CCL did not have to do the same thing when it went to the market.

[KirkNC]

 

This is a snippet of what O sent out to TA's per CC member Aloha 1.  This is no different then what CCL did last month, boast liquidity.

 

• "Today the Company has launched a series of capital markets transactions, led by Goldman Sachs, which are expected to raise approximately $2 billion. These transactions are expected to consist of 1) $350 million public offering of common equity, 2) $650 million exchangeable senior notes offering, 3) $600 million senior secured notes offering and 4) $400 million private placement from global consumer-focused private equity firm L Catterton.

 

• Contingent on completion of the transactions, the Company expects to have approximately $3 billion of liquidity. This strengthens the Company’s financial position and ensures it is well positioned to withstand well over 12 months of voyage suspensions in a potential downside scenario. While this is not the Company’s base case expectation, the Company has taken a proactive approach to protect its future given the significant uncertainty and unknown duration of the COVID-19 global pandemic."

[DFD1]

In my view, whether or not they survive depends on how robustly the market rebounds.

 

If passengers flock back to their ships and are willing to pay the increased cruise fares, NCL is likely to survive. If not, the financing alone will not save them.

 

While we rarely cruise with them, I would hate to see them fail.

[bluesea321]

Investors certainly did not like the news, NCL stock went down 22.6% today.

[rkacruiser]

DFD1,

 

I agree with you; I'd hate to see NCL fail.  Doing so would not be in the best interests of the cruise industry in general.

[Sir PMP]

If they go down, a lot of large ships will be available for a good price...

[KirkNC]

21 minutes ago, bluesea321 said:

Investors certainly did not like the news, NCL stock went down 22.6% today.

Due to issuing additional shares which dilutes existing shareholders.  Better then running out of cash, same thing happened when CCL sold stock to the Saudi’s.

[Mary229]

Regardless of spin, that they came forward with such a direct statement is not good news but a necessary step.  I think it is fair warning to the public, if they are paying attention.    If you were thinking about giving any cruise line any money right now this should be a wake up call. 

Edited May 5, 2020 by Mary229

[bluesea321]

1 hour ago, bluesea321 said:

Investors certainly did not like the news, NCL stock went down 22.6% today.

 

58 minutes ago, KirkNC said:

Due to issuing additional shares which dilutes existing shareholders.  Better then running out of cash, same thing happened when CCL sold stock to the Saudi’s.

 

No, when the Saudis disclosed their CCL stake the market perceived it as a positive move and CCL stock went up 11%, not down.

https://www.cnbc.com/2020/04/07/carnival-stock-soars-after-saudi-sovereign-wealth-fund-discloses-stake.html

 

In contrast when NCL disclosed the L Catterton stake today, and further steps to "enhance" their liquidity, the market perceived it as a negative move, not positive, and the stock went down 23% as I mentioned.

[Copper10-8]

There will be others...............

[KirkNC]

15 minutes ago, bluesea321 said:

 

 

No, when the Saudis disclosed their CCL stake the market perceived it as a positive move and CCL stock went up 11%, not down.

https://www.cnbc.com/2020/04/07/carnival-stock-soars-after-saudi-sovereign-wealth-fund-discloses-stake.html

 

In contrast when NCL disclosed the L Catterton stake today, and further steps to "enhance" their liquidity, the market perceived it as a negative move, not positive, and the stock went down 23% as I mentioned.

Your correct, CCL hit its low of $7.90 a few days before the Saudi announcement.   

[Himself]

1 hour ago, Copper10-8 said:

There will be others...............

John:  Sad but true.  I hope it doesn't happen to CCL.

[msmayor]

I booked my family on NCL Escape for a New Year's holiday at the end of this year - three mini-suite staterooms for a family trip that we've been dreaming about with our kids for years.  Final payment isn't due until August, and I haven't pulled the trigger to cancel yet, though it is highly likely.

 

I'm feeling very lucky that we booked under a special $50pp deposit promo so right now, only $250 at risk.  We haven'd paid anything else towards the trip, and when this whole COVID thing started up I told my kids not to book and pay for anything at all.  My 'loss' right now would be less than the cost of a travel insurance policy.

 

I can't see cruising being a realistic vacation for another year.  We'll probably cancel, and just rent a beach house somewhere in FL for the holiday instead.

[iancal]

I believe that NCL ships will not be the only ones on the auction block.  Buyers may be scarce.

 

Just imagine how Fincantieri must be feeling now.  No doubt they are carefully reviewing contracts and exit provisions.

[KirkNC]

11 hours ago, bluesea321 said:

 

 

No, when the Saudis disclosed their CCL stake the market perceived it as a positive move and CCL stock went up 11%, not down.

https://www.cnbc.com/2020/04/07/carnival-stock-soars-after-saudi-sovereign-wealth-fund-discloses-stake.html

 

In contrast when NCL disclosed the L Catterton stake today, and further steps to "enhance" their liquidity, the market perceived it as a negative move, not positive, and the stock went down 23% as I mentioned.

However, investors do seem happy enough to have over subscribed to the equity/debt offering of NCL.  Same thing happened when CCL did their offerings.

 

https://www.globenewswire.com/news-release/2020/05/06/2028074/0/en/NCL-Corporation-Ltd-Announces-Upsizing-and-Pricing-of-750-000-000-of-Exchangeable-Notes-and-675-000-000-of-Senior-Secured-Notes.html

 

 

[DaveOKC]

2 hours ago, KirkNC said:

However, investors do seem happy enough to have over subscribed to the equity/debt offering of NCL.  Same thing happened when CCL did their offerings.

 

https://www.globenewswire.com/news-release/2020/05/06/2028074/0/en/NCL-Corporation-Ltd-Announces-Upsizing-and-Pricing-of-750-000-000-of-Exchangeable-Notes-and-675-000-000-of-Senior-Secured-Notes.html

 

 

Very true statement.  Given the completion of the stock/bond offering, I expect NCL stock to rebound today.