Shares of Carnival Corp. soared 18% on heavy volume Monday, after the Saudi Arabia-based sovereign wealth fund The Public Investment Fund disclosed that it has acquired a 43.5 million shares, or an 8.2% stake, in the cruise operator. The filing said the shares were acquired as of March 26. That would make the fund Carnival's third-largest shareholder, based on an analysis of FactSet data. The fund was not listed among the top 20 stake holders prior to the filing, according to FactSet. The stock's trading volume swelled to 85.1 million shares in midday trading, already more than the full-day average of 61.2 million shares. Carnival's stock has tumbled 80% year to date, and closed last Thursday at the lowest price since April 1993. Meanwhile, shares of Royal Caribbean Cruises Ltd. have dropped 79% year to date and Norwegian Cruise Line Holdings Ltd. have plummeted 84%, while the S&P 500 has dropped 19%.
Norwegian Cruise Line Holdings, the world’s third-largest cruise company, has reportedly hired investment bank Goldman Sachs to help shore up its finances as it deals with the cruise industry’s standstill amidst the coronavirus crisis.
As Reuters reported on Saturday, the troubled cruise line is considering selling a large stake of the company in what is known as as private investment in public equity (PIPE), among other options. Sources told Reuters no deal was yet certain, and that other financing options were also being explored. Neither Goldman Sachs or Norwegian Cruise Line immediately responded to a request for comment from Skift.
All three of the major cruise lines were left out of the U.S. government’s multi-trillion dollar bailout because none of them are U.S. companies. This has left them in the position of needing to raise cash — and quick — now that their revenue has come to a standstill.
The world’s largest cruise company Carnival Corp. sold an 8 percent stake to Saudi Arabia’s public investment fund and Royal Caribbean secured a $2.2 billion loan in March. All three companies instituted a voluntary suspension of cruises in mid-March. Earlier in April, the Centers for Disease Control and Prevention extended its No Sail order to last until late July — though the cruise lines seem to have other ideas about when they will sail again, if not a legal leg to stand on.
Norwegian, which has 28 docked vessels in its fleet, has seen its share price drop nearly 80 percent since the beginning of the year. It also was the subject of a damning report in March from the Miami New Times that the company instructed its customer service representatives to mislead customers about the risks of booking and embarking on a cruise during the coronavirus crisis. The report led to an investigation from Florida’s attorney general.
Norwegian Cruise Line Holdings Ltd. NCLH, -19.88% said Tuesday its NCL Corp. subsidiary (NCLC) is proposing to sell $650 million in exchangeable senior notes due 2024 in a private offering. The notes will be convertible to Series A preference shares of NCLC, which will be exchangeable into a number of Norwegian Cruise ordinary shares. NCLC is also proposing to sell $600 million in senior secured notes due 2024 in a private offering. The announcement comes after Norwegian Cruise said earlier that the fact plans to obtain additional financing had not been completed raised "substantial doubt about the company's ability to continue as a going concern," given the "significant financial and operational impacts" due to the COVID-19 pandemic. The stock tumbled 13% in morning trading. Among actions the company is taking Norwegian said it will furlough 20% of its shoreside employees through July 31, although that date could change, while shoreside employees not furloughed will have shortened work weeks with a commensurate 20% salary cut at least through June 22. The cruise operator also said it has identified about $515 million of capital expenditure reductions. As of March 31, the company said it was in compliance will all of its debt covenants. The stock has plunged 78.6% year to date, while the S&P 500 SPX, 1.33% has lost 10.9%.
Market Data 
Markets 
