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June 19, 2020updated 21 Aug 2020 11:39am

Carnival to sell six cruise ships after loss of $4.4bn

Carnival Corporation has announced that it will sell six of its ships in the next 90 days to deal with a $4.4bn loss in the second quarter of the year.

Carnival Corporation has announced that it will sell six of its ships in the next 90 days to deal with a $4.4bn loss in the second quarter of this year.

The company has entered preliminary agreements for the divestment of the six ships in the next 90 days and hopes to sell additional ships in the future.

This comes after the suspension of cruise operations around the world due to the Covid-19 pandemic and the associated travel and health restrictions.

The cruise ship company said that it cannot foresee when it will resume normal cruising operations and is unable to announce earnings forecast.

The suspension of operations has negatively affected the business and continued pause in cruise operations will increase the impact on the liquidity and financial position of the company.

However, to prepare for the resumption of the cruising operations, the company has adopted additional safety measures and is collaborating with medical policy experts and public health authorities.

It has also introduced additional incentives for bookings for some cruise sailings, which is expected to ‘support guest confidence in making new bookings’.

Passengers whose cruises were cancelled due to the pause in operations will receive future cruise credits (FCC) or can choose to receive refunds in cash.

The company said that current ship operating and administrative expenses amount to $250m each month when all ‘ships are in paused status’.

The company has also introduced different measures to reduce monthly costs, which includes reduced operating expenses and capital expenditures.

Carnival Corporation owns nine cruise lines, which are Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises (Australia), Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises (UK) and Cunard.

In April, the Public Investment Fund, the sovereign wealth fund of Saudi Arabia, bought an 8.2% stake in Carnival .

Carnival previously announced plans to raise $6bn from senior secured notes and senior convertible notes amid the pandemic.

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