Carnival Corporation, the world’s largest travel leisure company operating nine cruise lines and 90 cruise ships, said that they are selling more cruise ships than previously announced.
Carnival earlier stated that the were in the process of selling 13 cruise ships across their various cruise lines. In an 8-K filed with the SEC yesterday, the company now plans to sell two additional ships bringing the total number of ships sold to 15.
Carnival said that the decision was intended to align their fleet with the expected phased restart of guest cruise operations while also generating cost savings. Carnival gave the following statement in their 8-K:
“On July 23, 2020, senior management of the Company evaluated these two ships for impairment and concluded their carrying values are no longer recoverable when compared to their estimated remaining future cash flows. Consequently, and in combination with other ships and notes receivables with recoverability impacted by the current environment, we expect to record non-cash impairment charges during the third quarter of 2020.
Although the actual amount of the charges has not yet been finalized, we expect the aggregate impairment charge to be in the range of $600 million to $650 million. We do not expect these impairments to result in any material future cash expenditures. We plan to continue to evaluate other options to maximize our liquidity and best position our fleet for future operations.”
Carnival did not state which two cruise ships were being removed from their fleet.
Carnival Corporation operates Carnival Cruise Line, Holland America Line, Princess Cruises, Cunard, Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises, and P&O Australia.
