Following the news that Carnival Corporation is securing finances of at least $6bn to combat the effects of the coronavirus (covid-19), Ben Cordwell, travel & tourism analyst at GlobalData, has offered his view on the situation.

“Panic has swept over the industry in the last week as speculation emerged that businesses wouldn’t qualify for aid under the US Government’s stimulus package,” he said.

“If this materialises it will be vital for companies to raise funding themselves to ensure they survive this turbulent period.

“By taking a proactive approach to the crisis, Carnival can reassure investors and greatly increase their chances of surviving the months to come.

“The world’s biggest cruise business is making a share offering to raise $3bn and issuing $1.75bn in senior convertible notes. The company has also begun an underwritten public offering of $1.25bn in shares of common stock.

“Carnival Corporation is not the first cruise business to begin securing finances as Royal Caribbean agreed $2.2bn loan facility with banks to shore up cash flows, last week.”

Carnival Corporation, which owns many major cruise lines including, P&O Cruises, Cunard, Princess Cruises and Holland America Line, announced its new financing deal on Monday (31 March).

As well as commencing an underwritten public offering of $1.25 billion of shares of common stock, underwriters are also being given an option to purchase up to $187.5 million of additional shares.

Last week, Carnival Corporation’s chairman Micky Arison sent out a message of support to trade, emphasising how it is now more important than ever for the company and the trade to work as partners.

Our view:

The cruise industry is facing an unprecedented and ever-changing situation, and we are committed to keeping you informed with the most up-to-date news. However, we firmly believe that the cruise industry will bounce back. When it does, we’ll be on hand to help you get back to selling the cruises that people love.