MIAMI – Norwegian Cruise Line Holdings has received the backing of a private equity company in its fight to mitigate the financial stresses of the Covid-19 crisis on the company’s operations.
In a public filing, one sentence stood out to investors: Norwegian Cruise Line Holdings disclosed there is “substantial doubt” about its ability to continue “as a going concern” unless steps are taken to increase liquidity.
“COVID-19 has had, and is expected to continue to have, a significant impact on our financial condition and operations, which adversely affects our ability to obtain acceptable financing to fund resulting reductions in cash from operations,” NCL said in a statement.
Also, in the regulatory disclosure, the company warned that should it be unable to fulfil its liquidity needs, “it may be necessary for us to reorganise our company in its entirety, including through bankruptcy proceeding”.
Enter private equity firm L Catterton which has stepped in with an investment of US$400 million.
In announcing his investment, L Catterton CEO, Scott Dahnke, said, “The cruise industry has been very resilient over a long period of time, driven by strong secular tailwinds and a high level of guest satisfaction.
“People enjoy cruising, with many guests taking multiple voyages over time.
“The industry has overcome numerous challenges in the past, and we expect that the industry will rebound and prosper with even further enhancements to their already rigorous health and safety protocols in place in the future.”
Mr Dahnke also said that Norwegian Cruise Line Holdings’ three brands (Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises) “have carved out distinctive leadership positions in their respective markets, guided capably by Frank Del Rio and his exceptional management team”.
“We couldn’t be more excited to support the team at Norwegian as they work through this suspension of travel and begin to commence operations after their voluntary suspension of voyages.”
In other cruise news, Carnival plans to phase in a resumption of its North American service as of 1 August from Miami, Port Canaveral and Galveston. However, Carnival's pause in operations will be extended in all other North American and Australian markets through 31 August.