Norwegian Cruise Line Holdings has secured over $2 billion in addition liquidity that will help keep the cruise company afloat during the current cruise shutdown. NCLH now has approximately $3.5 billion in liquidity.
Yesterday, NCLH announced the launch of a series of capital markets transactions, led by Goldman Sachs, to raise approximately $2 billion. The transaction has since been upsized to gross proceeds of $2.225 billion ($2.4 billion if the underwriters exercise their full overallotment options) due to significant oversubscription and demand across all three offerings.
The transactions consisted of (1) $400 million public offering of common equity, (2) $750 million exchangeable senior notes offering, (3) $675 million senior secured notes offering and (4) $400 million private investment from global consumer-focused private equity firm L Catterton.
Contingent on completion of the transactions, Norwegian expects to have approximately $3.5 billion of liquidity. This significantly strengthens the cruise line’s financial position and liquidity runway and it now expects to be positioned to withstand well over 12 months of voyage suspensions in a potential downside scenario.
While this is not Norwegian’s base case expectation, the company has taken a swift and proactive approach to protect its future given the significant uncertainty and unknown duration of the COVID-19 global pandemic.
When the transactions are completed, the additional liquidity alleviates management’s concern about the Norwegian Cruise Line Holding’s ability to continue as a going concern for the next 12 months.