The world’s largest cruise company, Carnival Corporation, is seeking an additional $6 billion (£4.85 billion) funding to mitigate the effects of the ongoing coronavirus crisis on its business.
Carnival – parent to P&O Cruises, Princess Cruises, Cunard and Holland America Line (HAL) – said Covid-19 had, and was continuing to have, a materially adverse impact on its operations and thus finances.
This, it said in a trading update issued on Tuesday (31 March), was limiting its ability to source the cash necessary to meet shortfalls arising from its inability to operate due to the infection.
“The spread of novel coronavirus and the recent developments surrounding the global pandemic are having material negative impacts on all aspects of our business,” said the firm.
Challenges to date have included Princess ship Diamond Princess being quarantined off the coast of Japan, it becoming an early and high profile outbreak of the coronavirus, and the ongoing spread of the virus onboard HAL ship Zaandam, which has so far been denied permission to dock by several countries.
Carnival is privately offering up an additional $3 billion in shares and $1.75 billion in senior convertible notes, or bonds. Separately, Carnival has also made an underwritten public offering of $1.25 billion shares of common stock, while underwriters will be given the opportunity to purchase up to $187.5 in additional shares.
The firm said it would use cash generated by the common stock offering “for general corporate purposes”.
In a filing to the US Securities and Exchange Commission, Carnival revealed it still had about 6,000 passengers at sea owing to coronavirus, who may not now disembark until the end of April. It also admitted its current “pause” in its global cruise operations would likely be extended, although no date has yet been placed on this with its various lines working to their own timetables.
“We currently estimate the substantial majority of our fleet will be in prolonged ship layup,” said the corporation.