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Carnival adds one vessel to disposal list

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 12 January 2021 12 January 2021

Carnival Corporation & plc, the world’s largest cruise shipping group, has increased the number of ships it intends to offload to 19 from 18, it said.

“Since the pause in guest operations, the company has accelerated the removal of ships in fiscal 2020 which were previously expected to be sold over the ensuing years. The company now expects to dispose of 19 ships, 15 of which have already left the fleet,’ Carnival said in its final quarter and full fiscal year 2020 result statement.

In the third quarter statement, the company said it plans to axe 18 old ships. The company did not state which ship has been added to the disposal list.

The 19 ships represent approximately 13% of pre-pause capacity and only 3.0% of operating income in 2019. “The sale of less efficient ships will result in future operating expense efficiencies of approximately 2.0% per available lower berth day ("ALBD") and a reduction in fuel consumption of approximately 1.0% ALBD,” Carnival said.

The company recently took delivery of two ships and expects only one more ship to be delivered in fiscal 2021, which runs till 30 November, compared to five ships that were originally scheduled for delivery in fiscal 2021.

“Based on the actions taken to date and the scheduled newbuild deliveries through 2022, the company's fleet will be more efficient with a roughly 14% larger average berth size per ship and an average age of 12 years in 2022 versus 13 years, in each case as compared to 2019,” Carnival said.

Photo: The 1998 built Sea Princess is one of the ships recently sold by the Carnival group

Three Carnival group units extend standstill

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 07 January 2021 07 January 2021

Carnival Cruise Line, Holland America Line and Princess Cruises, which are all parts of Carnival Corporation & plc, have decided to extend the standstill of their operations, the companies said in separate statements.

“Carnival Cruise Line is notifying guests of additional cruise cancellations, including extending its pause in all operations in the U.S. through March 31, 2021, as well as select ships and homeport operations related to itineraries and dry dock work,” the company said.

Booked guests and travel agents are being notified directly of the cancellations and their options for a generous future cruise credit and onboard credit package, or a full refund.

In summary, the cancellations include:

All embarkations from U.S. homeports through March 31, 2021

Carnival Freedom from Galveston through April 10, 2021 (which includes a repositioning of the ship from Galveston to Seattle and a 17-day Carnival Journeys cruise which is not allowed under the current guidelines issued by the U.S. Centers for Disease Control and Prevention (CDC)).

Carnival Miracle from San Diego and San Francisco through September 16, 2021 (which includes many 10-day and longer itineraries not allowed under the current CDC guidelines).

Carnival Liberty from Port Canaveral from September 17-October 18, 2021 (to accommodate rescheduled dry dock work).

Carnival Sunshine from Charleston from October 11-November 13, 2021 (to accommodate rescheduled dry dock work).

Carnival Spirit’s 15-day cruise from Singapore to Brisbane on June 12, 2021 (consistent with the current limitations on international travel in place in Australia).

Meanwhile, Holland America Line said as it continues to prepare and develop its plans to meet the Framework for Conditional Sailing Order issued by the U.S. Centers for Disease Control and Prevention (CDC), the company is extending its pause of cruise operations for all departures through April 30, 2021. This includes Alaska, Mexican Riviera, Pacific Coast, Caribbean, Mediterranean and Canada/New England departures.

Princess Cruises also said that it is extending its pause of guest cruise vacations on ships sailing through May 14, 2021. This includes sailings in the Caribbean, the California Coast, along with early season Alaska and Europe cruises.

TUI shareholders approve third financing package terms

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 07 January 2021 07 January 2021

An extraordinary shareholders meeting of TUI AG, which was held virtually, the presence, including votes cast, corresponded to 44.58 percent of the share capital. Shareholders approved the three agenda items with a large majority, the company said in a statement.

The reduction of share capital from €2.56 per share to €1.00 per share was approved by 99.59 percent of the shareholders, and the subsequent capital increase of approximately €509 million was approved by 97.95 percent. The conversion right of the WSF into shares of TUI AG in accordance with Silent Participation I was approved by 98.04 percent of shareholders.

Prior to this, the other components of the third financing package, which was announced on December 2, 2020, had already been fulfilled. The Economic Stabilization Fund (WSF) and TUI AG signed the agreement for two silent participations totaling 1.091 billion euros.

The WSF measures comprise a silent participation convertible into shares in TUI of €420 million. The second silent participation amounts to €671 million. “The second silent participation has been extended by the amount of the outstanding government guarantees as announced in the ad-hoc announcement of December 2, 2020. As soon as the guarantees are received, the second silent participation will be reduced accordingly. The EU Commission has already approved the contract,” TUI AG said.

The implementation of the components of the third financing package will also grant an prolongation of a portion of the existing KfW credit line in the amount of €500 million. This would otherwise have ceased to be available on April 1, 2021. The partial amount now also has a maturity like the rest of the existing KfW credit line (July 2022), once the outstanding senior bond is redeemed with the funds from the capital increase.

Under the third financing package, KfW is also participating in an additional loan facility together with private banks in the amount of €200 million.

Carnival group and lenders agree covenant changes

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 07 January 2021 07 January 2021

Carnival Corporation & plc, the world’s largest cruise shipping group, said and certain of their subsidiaries entered into an amendment agreement to the multicurrency revolving credit agreement originally dated May 18, 2011.

This was amended and restated most recently on August 6, 2019, among Carnival Corporation, Carnival plc, certain of their subsidiaries, the lenders party thereto and Bank of America Europe Designated Activity Company as facilities agent.

The amendment

increases the ratio of debt to capitalization from the testing date on November 30, 2021 to February 28, 2024 (Clause 26.3 of the Facility Agreement as amended by the Amendment Agreement (the “Amended Facility Agreement”)), expanding the limit of the debt to capitalization ratio;

introduces new financial covenants: a minimum liquidity covenant from the testing date on February 28, 2021 to November 30, 2022 (Clause 26.5 of the Amended Facility Agreement), and a minimum interest coverage covenant from the testing date on February 28, 2023, for the remainder of the term of the Facility Agreement (Clause 26.4 of the Amended Facility Agreement);

restricts the grant of guarantees in respect to certain outstanding debt until November 30, 2024 unless the entity granting the guarantee was already an obligor or guarantor of such debt (Clause 27.8 of the Amended Facility Agreement), and the incurrence of security interests on certain vessels to secure certain outstanding debt until November 30, 2024 (Clause 27.9 of the Amended Facility Agreement); and

requires Carnival Corporation, Carnival plc and their restricted subsidiaries to adhere to certain negative covenants and restrictions until November 30, 2024, including, but not limited to, limitations on indebtedness, liens, investments and restricted payments (subject to certain permitted exceptions), which are substantially consistent with those contained in the indenture governing the Carnival Corporation 5.625% Senior Unsecured Notes due 2026 (Clause 27.11 of the Amended Facility Agreement).

The Amendment Agreement also provides that during the remainder of the term of the Facility Agreement EURIBOR and LIBOR shall be deemed to have a 0% floor.

Some of the lenders under the Facility Agreement and their affiliates have various relationships with Carnival Corporation, Carnival plc and certain of their subsidiaries involving the provision of financial services, including cash management and investment banking services. In addition, Carnival Corporation and Carnival plc have entered into other loan arrangements as well as certain derivative arrangements with certain of the lenders and their affiliates, the company said.

UK cruise restart to take up to three months – reports

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 04 January 2021 04 January 2021

It would take up to three months to restart cruise operations in the UK and the industry would need a signal this month to res7ume operations by Easter, media reports said.

“The UK Chamber of Shipping and CLIA said the restart of cruises would take up to three months, meaning that a signal was needed in January to allow the industry to get ready,” Travel Weekly said in a report.

Ministers were told that 35% of advance bookings were usually made during December and January, underlining the need for a clear statement in favour of reopening the industry, The Times reported.

Government and industry officials are due to meet in the coming weeks to discuss a possible reopening.

In the autumn, Frank del Rio, President and CEO of Norwegian Cruise Line Holdings said it would take about 60 days to bring a ship back into service from cold lay up.

Photo: P&O Cruises took delivery of Iona in the autumn, but the ship has not been able to enter service yet