Warning of Loss, Carnival Moves to Shore Up Liquidity
By Jonathan Levin (Bloomberg) — Carnival Corp., the largest player in a cruise industry reeling from the effects of the coronavirus, said it expects a loss this fiscal year and is taking steps to improve liquidity.
The efforts include cutting investments and expenses and looking for additional financing, Carnival said in a statement Monday. The company said it provided notice on Friday to borrow about $3 billion for six months under an existing credit facility, fully drawing down the credit line to meet working capital, general corporate and other needs.
The spread of the coronavirus has made it impossible to project earnings, the company said, but it expects to have a loss in the year ending Nov. 30.
The cruise industry has been among the hardest hit in the world by the virus. On Friday, President Donald Trump tweeted that he had asked U.S.-based cruise lines to suspend voyages to halt disease transmission at sea. The move came after two major episodes of coronavirus spread on Carnival’s Princess Cruises and left the industry — which has massive fixed costs to meet — without passengers to generate revenue.
Carnival shares fell as much as 18% to $14.50 in New York trading Monday.© 2019 Bloomberg L.P
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