Cruise operator Carnival PLC (LON:CCL)(NYSE:CUK) warned that the docking of its ships because of coronavirus will have a “material negative impact” on its finances.
Having earlier cancelled all its North American cruise lines for at least a month and moored its Princess Cruise lines for at least 60 days, amid a drop in global demand for holidays due to the spread of coronavirus, the company said it was cutting costs and looking to tie down more financing.
To increase its cash position and “preserve financial flexibility", the company said it has taken up the option with its lenders to borrow roughly US$3bn, fully drawing down a revolving credit facility for the coming six months.
Carnival said the cash will be used for working capital, general corporate and other purposes
Earlier Carnival insisted that, rather than because of a drop in demand, it was temporarily cancelling its cruises “out of an abundance of caution to support the global effort to contain the spread of the COVID-19 coronavirus”.
Cruise operations across all brands will be kept in the harbour for at least the coming month.
Carnival Corporation chief executive Arnold Donald said, “we stand with the nation as we together seek to mitigate the spread”.
Last week, the group said the closure of Princess cruises was intended to “reassure our loyal guests”, with passengers offered the opportunity to transfer their cancelled holiday to a future cruise or a cash refund.