TUI, RCG and Carnival continue to raise funds
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- Written by Kari Reinikainen Kari Reinikainen
- Category: More News More News
- Published: 13 August 2020 13 August 2020
Three major cruise ship operators have raised additional liquidity in the past week in an effort to shore up their finances in the wake of the ongoing Covid-19 pandemic.
The German TUI AG group and KfW, the state owned developmsnt bank that has it head office in Frankfurt, have agreed to increase the existing KfW tranche by €1.05 billion. “The drawing of this amount is subject to (i) the issuance of a Convertible Bond to the Economic Stabilization Fund (WSF) in the amount of €150m and (ii) a waiver by the bondholders of the Senior Notes due in October 2021. Both conditions and other formal requirements need to be fulfilled by 30 September 2020,” TUI said in a statement.
The stabilisation package which totals at €1.2 billion strengthens TUI’s position and would provide sufficient liquidity in this volatile market environment to cover TUI’s seasonal swing through winter 2020-21 and thereafter and in the case of any further long-term travel restrictions and disruptions related to Covid-19.
Including the additional stabilisation package, TUI AG would, as of today, have cash and available facilities of €2.4 billion.
Similar to the first KfW tranche in the amount of €1.8 billion issued in April, the additional KfW tranche will be structured as an increase to TUI’s existing Revolving Credit Facility (“RCF”). The execution of the amendments with the RCF banking consortium is almost finalised.
“All conditions on the issuance of the Convertible Bond have been agreed. The potential Convertible Bond would be subscribed by the WSF subject to the conclusion of a subscription agreement and shall have an initial term of six years. The bond would bear interest at a rate of 9.5% p.a. TUI has a redemption right once the €1.05 billion KfW tranche is redeemed. If fully converted, it would represent a stake in TUI AG of up to 9%,” TUI said.
TUI owns 50% of the shares in TUI Cruises, which again owns in full Hapag-Lloyd Cruises. Marella Cruises in the UK is fully owned by TUI.
Meanwhile Royal Caribbean Group (RCG) said on 12 August that it has secured a binding commitment from Morgan Stanley for a $700 million term loan facility. The company may draw on the facility at any time prior to August 12, 2021. Once drawn, the loan will bear interest at L + 3.75% and will mature 364 days from funding.
“The facility will be guaranteed by RCI Holdings, LLC, a wholly owned subsidiary of the Company that owns the equity interests in subsidiaries that own seven of the Company's vessels. The Company has the ability to increase the capacity of the facility by an additional $300 million from time to time subject to the receipt of additional or increased commitments and the issuance of guarantees from additional subsidiaries of the Company. If drawn, the Company expects to use the net proceeds for general corporate purposes,” RCG said..
Carnival Corporation & plc on 7 August said it had closed its previously announced registered direct offering of 93,663,808 shares of its common stock at a price of $14.02 per share to a limited number of holders of its 5.75% Convertible Senior Notes due 2023 (the "Convertible Notes"). The Corporation used the proceeds from this closing to repurchase $836,284,000 principal amount of its Convertible Notes in privately negotiated transactions.
“The Corporation expects to close an additional 5.5 million shares as part of the registered direct offering on August 10, 2020. The Corporation intends to use the proceeds from the August 10th closing to repurchase an additional $49.3 million principal amount of its Convertible Notes in a privately negotiated transaction,” Carnival said.
Holland America Line extends its pause of cruise operations to all departures through Dec. 15, 2020
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- Written by Teijo Niemelä Teijo Niemelä
- Category: More News More News
- Published: 12 August 2020 12 August 2020
With the continuation of travel and port restrictions due to global health concerns, Holland America Line is extending its pause of cruise operations and cancelling departures on all ships through Dec. 15, 2020.
The pause extension affects Caribbean, Mexico, Panama Canal, Pacific Coastal, South America, Antarctica, Hawaii, South Pacific, Australia and Asia itineraries.
Those with impacted cruises automatically will be cancelled, and no action is needed for guests opting for the Future Cruise Credit (FCC). All guests will receive an FCC per person as follows:
– Paid in Full: Those who had paid in full will receive 125% FCC of the base cruise fare paid to Holland America Line.
– Not Paid in Full: Those with bookings not paid in full will receive an FCC of double the amount of the deposit paid for the cruise. The minimum FCC is $100 and the maximum will be an amount up to the base cruise fare paid.
The FCC is valid for 12 months from the date of issue and may be used to book sailings departing through Dec. 31, 2022. All other funds paid to Holland America Line may be transferred to a new booking or will automatically be refunded via the method of payment used to purchase the services.
Guests who prefer a 100% refund of monies paid to Holland America Line can visit the Cancellation Preferences form https://book2.hollandamerica.com/cp/ to indicate this preference no later than Sept. 15, 2020.
The above options are not applicable to guests booked on a charter sailing. Other booking and cancellation conditions and policies may apply if the cruise was not booked through Holland America Line. See the terms and conditions in the Cancellation Preferences form <https://book2.hollandamerica.com/cp/> for all details.
Recognizing the vital role travel advisors play in the success of the cruise industry, Holland America Line will protect travel advisor commissions on bookings for cancelled cruises that were paid in full and for the total amount of the FCC when rebooked.
As previously announced, Holland America Line paused global cruise operations and cancelled all Alaska, Europe and Canada/New England cruises for 2020; additional departures from the port of Vancouver, British Columbia, Canada, in 2020; and select Hawaii itineraries for early 2021.
Royal Caribbean Group second quarter loss $1.6 billion
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- Written by Kari Reinikainen Kari Reinikainen
- Category: More News More News
- Published: 11 August 2020 11 August 2020
Royal Caribbean Group (RCG), the second largest cruise shipping group in the world, has booked a deep loss in the second quarter and raised liquidity so that it can continue to weather the Covid-19 storm.
Net loss amounted to $1.6 billion in the second quarter of this year compared to a profit of $472.8 million in the same period last year.
The company has taken a number of steps to strengthen its finances in the recent past. These include:
-The issuance of $1.0 billion of priority guaranteed notes and $1.15 billion of convertible notes;
-The issuance of GBP 300 million of commercial paper in the UK providing over $370 million of additional liquidity;
-Completed a $0.9 billion 12-month debt amortization holiday from all export-credit backed facilities;
-Amended over $11 billion of commercial bank and export credit facilities to provide covenant waivers through the fourth quarter of 2021; and
-Further reduced operating expenses due to the fleet layup measures and actions to decrease sales, marketing and administrative expenses.
As per 30 June, debt worth $300 million was to mature before the end of this year, while $1.3 billion would mature in 2021.
RCG has $11.3 billion of committed credit facilities that are available to fund ship deliveries originally planned through 2025.
The company had $4.1 billion in liquidity at the end of the quarter and it reiterated its earlier assessment that its cash burn amounts to about $250 million to $290 million per month, it said.
AIDA, Marella and MSC Cruises gear up to restart of operations
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- Written by Kari Reinikainen Kari Reinikainen
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- Published: 10 August 2020 10 August 2020
Three deep sea cruise lines are working to resume operations in the coming weeks, the companies in question say.
AIDA Cruises in Germany, whose plans to resume sailings had to be shelved at a short notice, said it plans to start cruising on 6 September. “The prerequisite for this was the approval of the flag state Italy for the restart concepts,” the company said in a statement.
The fact that it had not obtain an approval from Italian authorities had forced the company to cancel a number of cruises that had been scheduled for this month.
“The first trips from Kiel will start on September 6, 2020. The first cruises with AIDAperla to the Norwegian fjords start from Hamburg on September 12, 19 and 26, 2020,” Rostock based AIDA Cruises said. The company is part of the Carnival group.
Meanwhile, Marella Cruises in the UK said it intends to commence fly cruises from Corfu on 2 October. This follows an earlier decision to suspend all operations until the end of September. The company will employ Marella Explorer on these cruises.
MSC Cruises has confirmed plans unveiled earlier to resume operations in the Mediterranean this week. MSC Grandiosa will welcome guests in the West Mediterranean from 16 August 2020 and MSC Magnifica in the East Mediterranean from 29 August 2020, the company said.
Costa Group's Michael Thamm: "We want cruise responsibly"
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- Written by Teijo Niemelä Teijo Niemelä
- Category: More News More News
- Published: 09 August 2020 09 August 2020
Following the authorization to cruise by the Italian Government, Costa Crociere prepares to gradually restart its operations in light of the new protocols that will be officialised soon.
“We are extremely excited that we will be able to cruise again soon and we want to thank the Italian Government and all the authorities for their constant availability and support. The cruise industry and Costa specifically, as the only Italian cruise company, create significant value to the economy and to the destinations we visit. The gradual restart of our operations will give relief to the local economies in port communities and to the whole ecosystem of almost 5,000 suppliers and business partners, and over 7,500 travel agents, in Italy, who have been suffering from the pause of our activities.” stated Michael Thamm, Group CEO Costa Group and Carnival Asia “
The resumption of our operations in this phase is also a great responsibility towards our guests, our crew members and the residents of the communities we visit. In the next days, we will be working closely with national and local authorities, ports and terminals, RINA and internally on board our ships, for the full implementation of the protocols issued by the Italian Government so we can all together guarantee a smooth, well organized and safe restart of our cruises, both on board and ashore. We look forward to announcing shortly the full program of our itineraries so that thousands of loyal Costa Guests can have the opportunity to sail again with us for the holiday they missed so much."
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