WHY IT RATES: Royal Caribbean Cruises is increasing liquidity in order to compensate for the detrimental effects of the coronavirus scare and has retracted its previously-released 2020 guidance. - Laurie Baratti, TravelPulse Associate Writer
Royal Caribbean Cruises today announced that, due to the spread and recent developments related to the COVID-19 outbreak, the company has increased its revolving credit capacity by $550 million, bolstering the company's liquidity.
The company is pursuing additional actions to improve its liquidity by reducing capital expenditures, operating expenses and taking other actions to improve liquidity by at least a further $1.7 billion in 2020. The company is also planning reductions to the 2021 capital expenditures and operating expenses.
The company had previously communicated that its 2020 guidance did not include the impact of the COVID-19 outbreak. Given the recent government actions and the heightened impact and uncertainty of changes in the magnitude, duration and geographic reach of COVID-19, the company is withdrawing its first quarter and full-year 2020 guidance.
"These are extraordinary times and we are taking these steps to manage the company prudently and conservatively," said Richard D. Fain, chairman and CEO. "I am proud of the work our teams are doing to address this unprecedented situation."
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