Novieon Cruise Line Warns of Bankruptcy Risk... Making Every Effort to Secure Funds

by Jeong Hyunjin

Published 06 May.2020 10:55(KST)

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Norwegian Cruise Line, a major global cruise company, has warned itself that the possibility of bankruptcy has increased due to the impact of the novel coronavirus infection (COVID-19).

According to CNBC and others on the 5th (local time), Norwegian Cruise Line stated in a document submitted to the U.S. Securities and Exchange Commission (SEC) that "if sufficient liquidity is not secured, company restructuring including filing for bankruptcy protection may become inevitable."

In particular, the company mentioned that it has been severely affected by the COVID-19 pandemic and expressed "significant doubts" about whether it can continue operations in the future. It added, "This is the first time we have completely suspended cruise ship operations, so we cannot fully predict the business impact of this unprecedented situation."

Norwegian Cruise Line revealed that due to travel cancellations caused by COVID-19, it is trying to secure $2.2 billion by pledging two ships and two islands as collateral to respond to refunds and avoid bankruptcy. Earlier last month, the company announced it would suspend cruise operations until the end of June.

Additionally, Norwegian Cruise Line announced that the private equity firm L Catterton has agreed to invest $400 million. After the possibility of the company's bankruptcy was mentioned, Norwegian Cruise Line Holdings' stock price plunged 22.58% on the New York Stock Exchange that day.