NCLH: “substantial doubt” about ability to continue as going concern

Details

Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 05 May 2020 05 May 2020

Norwegian Cruise Line Holdings Ltd. (NCLH), the world’s third largest cruise shipping group, has raised “substantial doubt” about its ability to continue as a growing concern as it does not have enough liquidity to meet its obligations over the next 12 months, it said in a statement.

This was published on the same day, 5 May, as the company unveiled a plan to raise a total of $2.00 billion i debt and equity.

The company said the aftermath of COVID-19 outbreak and, 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,” NCLH said.

“We anticipate needing additional financing, and such financing may not be available on favorable terms, or at all, and may be dilutive to existing shareholders”, we believe the net proceeds received in such financing along with our ability to defer certain debt payments will be sufficient to provide the necessary liquidity meet our obligations during the next 12 months, including the maintenance of minimum levels of liquidity required by certain of our debt agreements. There can be no assurance, however, that we will be able to complete such financing, raise sufficient additional capital or that other factors will improve enough to offset operating losses,” the company stated.

NCLH unveils $2.00 billion debt, equity offerings

Details

Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 05 May 2020 05 May 2020

Norwegian Cruise Line Holdings Ltd. (NCLH), the world’s third largest listed cruise shipping group, has unveiled debt and equity offerings totalling at $2.00 billion, of which $350 million is equity and the rest debt.

NCLH said it has commenced an underwritten public offering of $350 million of ordinary shares. “The Company intends to grant the underwriters an option to purchase up to $52.5 million of additional ordinary shares. The Company expects to use the net proceeds from the Offering for general corporate purposes,” NCLH said in a statement.

Meanwhile, NCL Corporation Ltd. (NCLC), a subsidiary of NCLH, announced today that it is proposing to sell $650 million aggregate principal amount of its exchangeable senior notes due 2024 in a private offering.

“NCLC intends to grant the initial purchasers of the Exchangeable Notes an option to purchase, during a 13-day period beginning on, and including, the first day on which the Exchangeable Notes are issued, up to an additional $97.5 million aggregate principal amount of Exchangeable Notes,” NLCH said.

“The Exchangeable Notes will be general senior unsecured obligations of NCLC, guaranteed by NCLH, and will be convertible at the holder’s option at any time prior to the close of business on the business day immediately preceding the maturity date into Series A Preference Shares of NCLC (“Preference Shares”), which shall be automatically exchangeable into a number of ordinary shares of NCLH,” the Miami based NCLH said.

In addition, NCLC is also proposing to sell $600 million aggregate principal amount of its senior secured notes due 2024 in a private offering.

“The Secured Notes and certain of the related guarantees will be secured by first-priority interests in, among other things and subject to certain agreed security principles, shares of capital stock in certain subsidiary guarantors, two of our vessels, our material intellectual property and two islands that we use in the operations of our cruise business,” NCLH stated..

Finally, NCLC announced a private placement of up to $400 million in aggregate principal amount of exchangeable senior notes due 2026 to an affiliate of L Catterton, the consumer focused private equity firm. "The Private Exchangeable Notes will accrue payment-in-kind interest at a rate of 7.0% per annum for the first year post-issuance, 4.5% per annum payment-in-kind interest plus 3.0% per annum cash interest for the following four years post issuance and 7.5% in cash for the final year prior to maturity," NCLH said.