Carnival Seeking Infusion of Capital

The world’s largest cruise operator is looking at ways to raise capital in the wake of the effects of the coronavirus, which has crippled the industry financially.

Carnival Corp. said Tuesday it will use a combination of secured notes, convertible notes and new shares to raise $6 billion to withstand the crisis. The entire industry has suspended itineraries for at least 30 days – some lines up to 60 days – as the global pandemic wreaks havoc across, especially in such closed quarters as a cruise ship.

Outbreaks on Carnival-owned ships – which include Carnival, Costa Cruises, Holland America and Princess Cruises – have killed several passengers and sickened hundreds.

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Carnival said it intends to raise $3 billion of secured notes and $1.75 billion of convertible notes — both due in three years — as well as $1.25 billion of new shares. CNN quoted Wedbush analyst James Hardiman as saying Carnival is losing $500 million a month, and the $6 billion should be enough to carry it through the next 12-13 months.

Carnival and its fellow cruise line companies were not included in the stimulus package signed by President Trump last week. Carnival’s stock is down 74 percent for the year.

The company has been especially hard-hit by the virus. Its Diamond Princess was stuck off the coast of its homeport in Yokohama, Japan, in February as more than 700 passengers contracted COVID-19; four died.

And, currently, the Holland America Zaandam is headed toward Fort Lauderdale after having been at sea since March 7 and denied entry to nearly a half-dozen ports on its South American itinerary. It is still unknown as of publication date whether Port Everglades in Fort Lauderdale will allow the ship to disembark there.

The Zaandam is carrying four deceased passengers and 200 sick guests, including nine who have tested positive for the virus.