Unable to take customers around the world on their cruise ships, Carnival Corp. hopes to sell some shares.
The cruise operator announced on Monday afternoon that it will sell $ 1 billion in new shares, as its ships remain moored due to the COVID-19 pandemic. Carnival CCL,
in January it extended the cancellation of US departures until the end of April, at the same time as it canceled trips departing from Australia and Europe. The company recently announced the planned resumption of Italian departures.
While the coronavirus pandemic closes the cruise lines, investors look to their stocks as a way to play a possible recovery. After falling sharply in early 2020, fearing a prolonged close, the shares were revived: while Carnival’s shares fell 37.7% last year, the shares gained more than 77% in the last six months and almost 50% in the past three months.
Carnival lost more than $ 2 billion in its last completed quarter, but chief financial officer David Bernstein said when these results were released that the company has “the liquidity to sustain itself throughout 2021, even in a zero-revenue environment” .
Carnival has relied mainly on debt offers to overcome the pandemic, including a $ 3.5 billion debt offer earlier this month. The company’s credit rating was placed under “review for downgrade” at Moody’s Investors Service earlier this month, and is already deeply assessed on “junk” status.
Last month, Truist Securities analyst Patrick Scholes wrote in a note that US cruise ships could remain at anchor until 2022, although cruises are more likely to resume later this year.
“Now we see July as the best case to restart,” although the fourth quarter is more likely, he wrote.
Carnival’s shares fell about 2.5% on Monday’s trading after the announcement.