Royal Caribbean Withdraws 2020 Guidance and Increases Borrowing Capacity

Royal Caribbean withdrew its 2020 guidance and increased its borrowing capacity, amid turmoil in the travel industry prompted by the spread of the coronavirus.
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Royal Caribbean Cruises  (RCL) - Get Report withdrew its 2020 financial guidance and increased its revolving-credit facility by $550 million, prompted by the proliferation of the coronavirus.. 

The increased credit capacity gives Royal Caribbean increased liquidity as consumers and investors move away from the travel industry amid concern about the spread of the coronavirus. 

The Miami company said it was also pursuing additional actions to improve liquidity by reducing expenditures and operating expenses.

While the company did not specify those initiatives, it did say that it hoped to improve liquidity by at least a further $1.7 billion in 2020. Royal Caribbean also said it was planning to reduce its 2021 capital expenditures and operating expenses. 

"These are extraordinary times and we are taking these steps to manage the company prudently and conservatively," Chairman and CEO Richard D. Fain said in a statement. RCL's staffers are working "to address this unprecedented situation."

Last week, Royal Caribbean adopted a "Cruise With Confidence" policy that enables customers on its Royal Caribbean International, Celebrity Cruises, Azamara and Silversea lines to cancel up to 48 hours before a sailing. 

Customers who cancel will receive full credit for their fare, usable on a future cruise in 2020 or 2021. 

"When circumstances are as fast-changing as they have been recently, it's good to know you have the option to take a rain check," Fain said.

At last check Royal Caribbean shares rose 1% to $48.76.

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