A 14-page type 8-K submitted with the SEC today by Norwegian Cruise Line’s moms and dad Norwegian Cruise Line Holdings (NYSE: NCLH) paints a grim image of the influence of the coronavirus on the firm and also, by expansion, the majority of significant cruise ship cellular linings.
In the declaring, the firm claims that claims that the recurring impacts of COVID-19 on its procedures and also worldwide reservations have actually had, and also will certainly remain to have, a considerable influence on its economic outcomes and also liquidity, which the adverse influence might proceed well past the control of the episode.
“This is the first time that we have completely suspended cruise voyages, and as a result of these unprecedented circumstances, we are not able to predict the full impact of such a suspension on our company,” claims the declaring. “In addition, the magnitude and duration of the global pandemic is uncertain. Consequently, we cannot estimate the full impact on our business, financial condition or near- or longer-term financial or operational results with reasonable certainty, but we expect to report a net loss on both a U.S. GAAP and adjusted basis for the quarter ended March 31, 2020 and the year ending December 31, 2020.”
In the declaring, the firm claims that at December 31, 2019, and also March 31, 2020, it remained in conformity with every one of its financial obligation agreements.
“If we do not continue to remain in compliance with these covenants, we would have to seek additional amendments to these covenants,” claims the declaring.”However, no guarantees can be made that such modifications would certainly be accepted by our loan providers. Generally, if an occasion of default under any type of financial obligation arrangement takes place, after that according to go across default and/or cross velocity provisions, considerably every one of our arrearage and also acquired agreement payables might come to be due, and also all financial obligation and also acquired agreements might be ended, which might have a product negative influence to our procedures and also liquidity.”
The declaring claims that “in particular the suspension of cruise voyages and decline in advanced bookings, as well as debt maturities and other obligations over the next year, and the fact that 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, as the company does not have sufficient liquidity to meet its obligations over the next twelve months, assuming no additional financing or other proactive measures.”
Elsewhere, the declaring claims “if we are not able to fulfill our liquidity needs through operating cash flows and/or borrowings under credit facilities or otherwise in the capital markets, our business and financial condition could be adversely affected and it may be necessary for us to reorganize our company in its entirety, including through bankruptcy proceedings, and our shareholders may lose their investment in our ordinary shares.”
In the declaring, the firm claims “The COVID-19 episode has actually led to extraordinary functional difficulties for the cruise ship market normally in addition to the firm. In enhancement, the firm remains in the procedure of completing its a good reputation and also brand name problems evaluation. The firm is consequently incapable to submit the First Quarter Form 10-Q on its popular timetable. The firm anticipates to submit the First Quarter Form 10-Q no behind May 15, 2020.
Access the complete declaring HERE
