Norwegian Cruise Lines Bites the Bullet and Raises More Money: Why That's Good and Bad
Norwegian Cruise Lines (NYSE: NCLH) fell 22.6% on Tuesday, May 5, after the company released a statement saying that, absent more funding, the company might not last through the year. The COVID-19 outbreak has caused a huge amount of damage to the cruise industry, with "no-sail" orders extending through July and an uncertain future as to whether cruise companies will ever set sail again. Ominously, Norwegian stated, "the Company does not have sufficient liquidity to meet its obligations over the next twelve months, assuming no additional financing or other proactive measures."
However, the day before this release, the beleaguered cruise line actually did raise additional funds: $400 million in convertible debt from private equity firm L Catterton.
The company then followed that up by raising over $1.8 billion on Wednesday, May 6, in a mix of stock and debt. The total haul of around $2.2 billion should help shore up Norwegian's balance sheet for "well over twelve months," according to the company. But the new money comes at a big cost.
Source Fool.com
