Because it cannot take customers around the world with its cruise ships, Carnival Corp expects to sell shares instead.
The cruise operator announced on Monday afternoon that it will sell $ 1 billion in new shares as its ships remain at the quay due to the COVID-19 pandemic. Carnival CCL,
in January, his cancellation of departure from the US extended to the end of April, while travel from Australia and Europe was also canceled. The company recently announced the planned resumption of Italian departure.
While the coronavirus pandemic closed cruise lines, investors looked at their stocks as a way to finally recover. After shares plummeted in early 2020 for fear of a prolonged closure, shares revived: While Carnival shares have fallen 37.7% over the past year, shares have risen more than 77% over the past six months , and in the past almost 50% three months.
Carnival lost more than $ 2 billion in the last quarter, but Chief Financial Officer David Bernstein said in announcing the results that the company “has the liquidity in place to sustain ourselves in 2021, even in an environment with no income. “
Carnival mostly relied on debt deals to get through the pandemic, including a $ 3.5 billion debt offering earlier this month. The company’s credit rating was rated ‘downgrade’ on Moody’s Investors Service earlier this month and is already being assessed deep in junk status.
Last month, Truist Securities analyst Patrick Scholes wrote in a note that U.S. cruise ships could be captured in 2022, although it is likely that shipping will resume later this year.
“We now consider July to be the best case for restarting,” although the fourth quarter is more likely, he wrote.
Carnival shares fell about 2.5% in post-trading on Monday after the announcement.