Carnival to Cut Costs and Boost Liquidity Amid Coronavirus Crisis

Carnival takes additional actions to offset the unprecedented impact of the coronavirus, including cutting costs and pursuing $3 billion in liquidity financing.
Author:
Publish date:

Embattled cruise operator Carnival Cruise Lines  (CCL) - Get Report on Monday announced it was taking additional actions to offset the unprecedented impact the coronavirus onslaught has had on its business, including cutting costs and pursuing an additional $3 billion in financing to boost liquidity.

The cruise operator, which late last week paused operations across its fleet of ships based in North America through April 9, also said it was unable to provide an earnings forecast, though does expect to post an operating loss for its fiscal year ending Nov. 30.

In a statement, the company said ongoing effects of the coronavirus on its operations and global bookings will have “a material impact” on its financial results and liquidity. On Friday, the company provided notice to its lenders to borrow approximately $3 billion under its facility agreement for a period of six months.

"While Carnival has not had a diagnosed case linked to our operation, we realize this situation is bigger than the cruise industry and we will continue to do our part to support public officials to manage and contain this unprecedented public health challenge," the cruise line said in a statement last week.

Carnival operates the Diamond Princess, where dozens of passengers became infected with Covid-19 when it docked in Japan in January. That ship was quarantined for two weeks.

Two Japanese passengers who were quarantined on the Diamond Princess cruise ship in Yokohama died from the virus.

In early March, a second Carnival cruise ship, the Grand Princess, was locked down after a former passenger died from the coronavirus.

Health officials in Placer County, California, said that an unnamed 71-year-old man who traveled on the Grand Princess in February from San Francisco to Mexico died from the respiratory disease. He was the first person to die from the illness in California.

That ship eventually docked in Oakland, Calif., with passengers being screened and quarantined.

Shares of Carnival were down 11% at $15.65 on Monday.