Norwegian Cruise Line says that a continuing Covid-19 crisis could threaten its survival

Miami-Florida-headquartered Norwegian Cruise Line Holdings Ltd, the world’s third-largest cruise operator, has indicated that it might be unable to get through the Covid-19 pandemic and come out the other side.

Norwegian said that “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,” Norwegian said. The company said that, as of April 24th, advance bookings for the remainder of the year were “meaningfully lower than the prior year, with pricing down mid-single digits.”

Norwegian said it does not have sufficient liquidity to meet its obligations over the next 12 months.

It has launched a $1.6bn share and bond offering and has announced a $400m investment in a subsidiary from private equity firm L Catterton.

L Catterton co-CEO Scott Dahnke will take a seat on Norwegian’s board as part of the deal.

The company’s shares closed down more than 20% on Tuesday May 5th after the financing plans were announced.

Norwegian has suspended its sailings until at least June 30th and has not announced a date for recommencing any cruises. On Monday this week Carnival announced plans to resume some cruises out of Florida and Texas on August 1st.

Because the major players in the US cruise industry have chosen to incorporate outside the US, it was left out of a $2.3trn US stimulus package for troubled companies.

Norwegian is also facing class-action lawsuits alleging that it made false and misleading statements to the market and customers about Covid-19 and its impact on its business. Norwegian says that these allegations are without merit.