Norwegian Cruise Line Holdings (NCLH), which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands, has stated there is “substantial doubt” about its ability to continue as a going concern, should it not secure additional financing or other measures.
In a statement to the United States Securities and Exchange Commission, NCLH said a number of factors, “in particular the suspension of cruise voyages and decline in advanced bookings” – due to the coronavirus crisis – as well as debt maturities and other obligations over the next year, on top of the fact its management’s plan to obtain additional financing has not yet been completed, “have raised substantial doubt about the company’s ability to continue as a going concern”.
In March the company implemented a voluntary suspension of all cruise voyages across its three brands, which has subsequently been extended to 30 June.
“The company does not have sufficient liquidity to meet its obligations over the next twelve months, assuming no additional financing or other proactive measures,” said the statement.
“The company has taken, and anticipates taking, significant additional actions to increase liquidity, extend debt maturities, delay obligations and reduce operating costs.
“In addition, the company has been evaluating a number of financing transactions that, if successful, would provide net proceeds which are anticipated to be sufficient to provide the liquidity necessary to satisfy its obligations over the next twelve months, including the maintenance of minimum levels of liquidity required by certain of our debt agreements.”
NCLH warned, though: “There can be no assurance, however, that the company will be able to complete any such financing transaction, raise sufficient additional capital, finalise additional amortization deferrals or that revenues will increase rapidly enough to offset operating losses that will provide with sufficient liquidity to satisfy its obligations over the next twelve months, or maintain minimum levels of liquidity as required by certain of our debt agreements.”
NCLH further revealed that as of April 24, advanced bookings for the remainder of 2020 were meaningfully lower than the prior year, “with pricing down mid-single digits”.
“Booking trends indicate demand for cruise vacations in the medium and longer term with the booked position for 2021 slightly lower compared to same time last year at pricing that is down mid-single digits versus prior year,” it said.
“During the temporary suspension of our cruise voyages, we expect to be required to pay cash refunds of advanced ticket sales with respect to a portion of our cancelled cruises.”