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Norwegian Cruise Line Sells $790 Million of High-Yield Bonds (2)

By Ethan M Steinberg

A unit of Norwegian Cruise Line Holdings Ltd. sold a $790 million junk-bond to refinance debt as the cruise industry rebounds from the pandemic.

The senior secured notes due 2029 were sold with a coupon of 8.125%, tightening from initial discussions of around 8.5%, according to a person familiar with the matter, who wasn’t authorized to speak publicly. Proceeds will be used to repay the outstanding term loans under the company’s senior secured credit facility, according to a statement .

The debt is backed by 14 of Norwegian’s ships, which also secure the company’s senior secured notes due 2028. JPMorgan ...

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NCL, Oceania, RSSC parent company NCLH hints at bankruptcy

Post date: May 5 2020

Date: May 5 2020

By: Travelweek Group

MIAMI — Norwegian Cruise Line Holdings, the parent company of NCL, Oceania Cruises and Regent Seven Seas Cruises, has updated its filing with the U.S. Securities and Exchange Commission with what amounts to a dire warning about its solvency amid the coronavirus crisis.

Amid the financial-speak typical of an SEC filing, NCLH outlines the circumstances facing the cruise company as the cruise industry looks ahead to its third month of operation suspensions.

NCLH says the temporary halt to sailings worldwide and the almost complete loss of forward bookings, as well as other financial obligations, have cast doubt on whether or not the company can continue “as a going concern”.

Summing up the situation brought on by travel restrictions amid the COVID-19 pandemic, NCLH says in its filing that “the factors described above, in particular the suspension of cruise voyages and decline in advanced bookings, as well as debt maturities and other obligations over the next year, and the fact that management’s plan to obtain additional financing has not yet been completed, have raised substantial doubt about the Company’s ability to continue as a going concern, as the Company does not have sufficient liquidity to meet its obligations over the next twelve months, assuming no additional financing or other proactive measures.”

NCLH made the filing with the SEC today, saying it wanted to provide an update about its liquidity and management’s plans in anticipation of additional financing transactions.

“We believe the ongoing effects of COVID-19 on our operations and global bookings have had, and will continue to have, a significant impact on our financial results and liquidity, and such negative impact may continue well beyond the containment of such an outbreak,” says NCLH.

NCLH says that as of April 24, 2020, “advanced bookings for the remainder of 2020 were meaningfully lower than the prior year with pricing down mid-single digits. Booking trends indicate demand for cruise vacations in the medium and longer term with the booked position for 2021 slightly lower compared to same time last year at pricing that is down mid-single digits versus prior year.”

The company says that it expects to be required to pay cash refunds of advanced ticket sales with respect to a portion of our cancelled cruises. “All three brands [NCL, Oceania Cruises and Regent Seven Seas Cruises] have instituted programs for guests on canceled sailings as a result of the Company’s voyage suspension which include offering value-add future cruise credits typically for 125% of the cruise fare paid in lieu of providing cash refunds.”

As of March 31, 2020, “the Company had US$1.8 billion of advanced ticket sales. This includes approximately $850 million for previously announced voyage cancellations through June 30, 2020 where guests have the option of either a future cruise credit or a cash refund and approximately $350 million for voyages scheduled for the remainder of 2020.

“Depending on the length of the suspension and level of guest acceptance of future cruise credits, we may be required to provide cash refunds for a substantial portion of the balance, as guests on cancelled sailings were automatically awarded future cruise credits and have the opportunity to contact us to request a cash refund rather than future cruise credits.

“As of April 24, 2020, approximately half of the guests who have had their voyages cancelled and who have contacted us have requested cash refunds. There can be no assurance that the percentage of passengers that accept future cruise certificates over cash refunds will remain in this range as the number of cancelled voyages increases. Guests who have accepted future cruise credits may utilize those credits until December 31, 2022.

“The use of such credits may prevent us from future cash collections as staterooms booked by guests with such credits will not be available for sale, resulting in less cash collected from bookings to new guests; however, we may benefit from the onboard revenue from these guests. We continue to take future bookings for 2020, 2021 and 2022, and receive new customer deposits and final payments on these bookings which will offset a portion of the outflow from expected cash refunds.”

Tags: Lead Story, NCL, NCLH, Oceania Cruises, Regent Seven Seas Cruises

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Norwegian Cruises Warns Of Bankruptcy Filing: Will The Cruise Line Survive?

As the coronavirus crushes down on the cruise line industry, Norwegian Cruise Line ( NCLH ) becomes the first company to issue a warning about its financial ability to continue operations, saying that bankruptcy may be imminent.

The company filed the notice with the Securities and Exchange Commission , saying that is has a “going concern” and “substantial doubt” based on the impact of the coronavirus pandemic. It warned that restructuring might be needed through bankruptcy protection.

Norwegian said in its filing on Tuesday, “The current, and uncertain future, impact of the COVID-19 outbreak, including its effect on the ability or desire of people to travel (including on cruises), is expected to continue to impact our results, operations, outlook, plans, goals, growth, reputation, cash flows, liquidity, demand for voyages and share price.”

The filing cited “meaningfully lower” cruise ship bookings for the rest of 2020 and into 2021, in addition to lower pricing levels. The company said, “During the temporary suspension of our cruise voyages, we expect to be required to pay cash refunds of advanced ticket sales with respect to a portion of our canceled cruises.”

For cruise bookings that were canceled, Norwegian has added value to its refunds to encourage future bookings instead of cash refunds. The company also plans to reduce ship operating costs and administrative expenses as well as implement a hiring freeze and shorted work weeks with reduced hours for employees to create a 20% salary reduction. It has also halted its 401k matching program.

Norwegian also said it furloughed about 20% of its workforce on May 1, which is expected to last through July 31. Employees will receive health benefits during this time.

The news of Norwegian’s financial woes comes after the Centers for Disease Control and Prevention issued a no sail order in April for 100 days.

Shares of Norwegian Cruise Line stock were down 22.58% as of market close on Tuesday.

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Norwegian Cruise Line may go bankrupt?

NCLH-Norwegian Cruise Line Holdings announced there was “substantial doubt” about the ability of the company to continue amid the COVID-19 pandemic and warned it might have to seek bankruptcy protection.

The 3rd largest cruise company in the world is headquartered in Miami Florida with service out of Port Tampa Bay . NCLH revealed in a securities filing on Tuesday, May 5, it expected to report net losses for the Q1 (ending on March 31). The company owns 3 cruise lines - Oceania Cruises , RSSC-Regent Seven Seas and NCL-Norwegian Cruise Line .

The filing said:

“If we are not able to fulfill our liquidity needs through operating cash flows and/or borrowings under credit facilities or otherwise in the capital markets, our business and financial condition could be adversely affected and it may be necessary for us to reorganize our company in its entirety, including through bankruptcy proceedings, and our shareholders may lose their investment in our ordinary shares.” 

NCLH shares were down 18% in Tuesday trading. NCLH has seen its market cap plummet from USD 12 billion at the end of 2019 to less than USD 3 billion yesterday. 

Also on Tuesday, it announced a USD 400 million infusions into one of its subsidiaries (Norwegian Cruise Line Corporation Ltd) from private equity firm L Catterton. This new deal gives the firm a seat on NCLH’s board of directors.

NCLH is proposing to sell USD 650 million of exchangeable senior notes due in 2024 in a private offering as senior unsecured notes, as well as an additional USD 600 million in senior secured notes due 2024 in a private offering.

Last month, NCLH also said it had fully tapped a USD 1.55 billion credit facility (from JPMorgan Chase) and its bonds had been downgraded by rating agencies S&P Global and Moody’s. In an April 27 press release, NCLH said that it was burning through USD 110-150 million per month as cruises remain paused. It had also identified around USD 515 million of capital expenditure reductions, including furloughs for 20% of ashore staff announced last week. Still, Tuesday’s filing said that it might not be enough to get through the pandemic.

“We believe the ongoing effects of COVID-19 on our operations and global bookings have had and will continue to have, a significant impact on our financial results and liquidity, and such negative impact may continue well beyond the containment of such an outbreak,” the filing said.

As of March 31, the company had USD 1.8 billion in advanced ticket sales across its 3 brands. That included USD 850 million for sailings that have been canceled through June 30 and USD 350 million for the remainder of this year. Around half of the travelers who had their voyage canceled are opting for a refund over a future credit with the cruise company, further limiting its cash holdings. Bookings for the rest of the year are “meaningfully lower” than for 2019, the company said in a press release in April.

The cruise industry shut down new sailings on March 13, followed by a no-sail order from the CDC that has been extended until at least July 24.

Cruises for the three brands of NCLH are currently canceled through June 30.

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A recent filing with the Securities and Exchange Commission from Norwegian Cruise Line Holdings LTD describes financial problems due to COVID 19 and indicates it is possible the company will have to file for bankruptcy.

The filing , dated May 5, says the company will need additional financing moving forward.

The company said there’s “substantial doubt” about its ability to continue as the coronavirus pandemic continues to keep the entire cruise industry shuttered.

"Our financial statements contain a statement regarding a substantial doubt about the company's ability to continue as a going concern," the company says in the filing.

The company writes about the need for money: "We anticipate needing additional financing, and such financing may not be available on favorable terms, or at all."

The documents paint a possible future for the company: “If we are not able to fulfill our liquidity needs through operating cash flows and/or borrowings under credit facilities or otherwise in the capital markets, our business and financial condition could be adversely affected and it may be necessary for us to reorganize our company in its entirety, including through bankruptcy proceedings, and our shareholders may lose their investment in our ordinary shares.”

The cruise industry brings in millions in revenue to Port Canaveral and surrounding areas, but the industry has been halted due to the coronavirus since mid-March.

The documents mentioned the CDC's 'no sail order' for the cruise industry. They add so far, they have voluntarily suspended all voyages through June 30.

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Norwegian Cruise Line Stock Probability Of Bankruptcy

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Norwegian Cruise Line Company probability of distress Analysis

Norwegian probability of bankruptcy driver correlations, norwegian probability of bankruptcy peer comparison, norwegian cruise main bankruptcy drivers, norwegian cruise esg sustainability, norwegian fundamentals, about norwegian cruise fundamental analysis, currently active assets on macroaxis, additional information and resources on investing in norwegian stock, common destinations.

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Press Releases

Norwegian cruise line holdings announces amendment and extension of operating credit facility.

MIAMI, Dec. 09, 2022 (GLOBE NEWSWIRE) -- Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) (the “Company”) today announced it has amended and extended the majority of its operating credit facility consisting of its senior secured revolving credit facility and senior secured term loan A facility (the “Operating Credit Facility”) on December 6, 2022. The amendment has resulted in the extension of maturities of approximately $1.4 billion of the Operating Credit Facility by one year to January 2025 1 . The Company is actively pursuing alternatives to address the remaining debt associated with the Operating Credit Facility that will otherwise mature in January 2024.

“We are pleased to have successfully amended and extended the majority of our Operating Credit Facility by one year to 2025,” said Mark A. Kempa, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd. “As part of this amendment, we were able to modify certain financial covenants and secure additional debt capacity of $1.5 billion, including approximately $0.5 billion of secured debt capacity. While we continue to believe our ongoing and organic cash generation provides a path to restore our balance sheet over time, the increase in debt capacity provides meaningful additional financial flexibility, if needed, as we prepare for multiple scenarios in an uncertain macroeconomic environment.”

The Operating Credit Facility consists of the $875.0 million senior secured revolving credit facility and the senior secured term loan A facility with an outstanding principal amount of approximately $1.5 billion as of September 30, 2022. Additional details on the terms of the amendment can be found in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 9, 2022.

About Norwegian Cruise Line Holdings Ltd.

Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) is a leading global cruise company which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. With a combined fleet of 29 ships with over 60,000 berths, these brands offer itineraries to approximately 500 destinations worldwide. The Company has eight additional ships scheduled for delivery through 2027, comprising over 20,000 berths.

Cautionary Statement Concerning Forward-Looking Statements

Some of the statements, estimates or projections contained in this release are “forward-looking statements” within the meaning of the U.S. federal securities laws intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this release, including, without limitation, those regarding our business strategy, financial position, results of operations, plans, prospects, actions taken or strategies being considered with respect to our liquidity position, valuation and appraisals of our assets and objectives of management for future operations (including those regarding expected fleet additions, our expectations regarding the impacts of the COVID-19 pandemic, Russia’s invasion of Ukraine and general macroeconomic conditions, our expectations regarding cruise voyage occupancy, the implementation of and effectiveness of our health and safety protocols, operational position, demand for voyages, plans or goals for our sustainability program and decarbonization efforts, our expectations for future cash flows and profitability, financing opportunities and extensions, and future cost mitigation and cash conservation efforts and efforts to reduce operating expenses and capital expenditures) are forward-looking statements. Many, but not all, of these statements can be found by looking for words like “expect,” “anticipate,” “goal,” “project,” “plan,” “believe,” “seek,” “will,” “may,” “forecast,” “estimate,” “intend,” “future” and similar words. Forward-looking statements do not guarantee future performance and may involve risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to the impact of: the spread of epidemics, pandemics and viral outbreaks, including the COVID-19 pandemic, and their effect on the ability or desire of people to travel (including on cruises), which is expected to continue to adversely impact our results, operations, outlook, plans, goals, growth, reputation, cash flows, liquidity, demand for voyages and share price; implementing precautions in coordination with regulators and global public health authorities to protect the health, safety and security of guests, crew and the communities we visit and to comply with regulatory restrictions related to the pandemic; our indebtedness and restrictions in the agreements governing our indebtedness that require us to maintain minimum levels of liquidity and be in compliance with maintenance covenants and otherwise limit our flexibility in operating our business, including the significant portion of assets that are collateral under these agreements; our ability to work with lenders and others or otherwise pursue options to defer, renegotiate, refinance or restructure our existing debt profile, near-term debt amortization, newbuild related payments and other obligations and to work with credit card processors to satisfy current or potential future demands for collateral on cash advanced from customers relating to future cruises; our need for additional financing or financing to optimize our balance sheet, which may not be available on favorable terms, or at all, and our outstanding exchangeable notes and any future financing which may be dilutive to existing shareholders; the unavailability of ports of call; future increases in the price of, or major changes or reduction in, commercial airline services; changes involving the tax and environmental regulatory regimes in which we operate, including new regulations aimed at reducing greenhouse gas emissions; the accuracy of any appraisals of our assets as a result of the impact of the COVID-19 pandemic or otherwise; our success in controlling operating expenses and capital expenditures; trends in, or changes to, future bookings and our ability to take future reservations and receive deposits related thereto; adverse events impacting the security of travel, such as terrorist acts, armed conflict, such as Russia’s invasion of Ukraine, and threats thereof, acts of piracy, and other international events; adverse incidents involving cruise ships; adverse general economic and related factors, including as a result of the impact of the COVID-19 pandemic, Russia’s invasion of Ukraine or otherwise, such as fluctuating or increasing levels of interest rates, inflation, unemployment, underemployment and the volatility of fuel prices, declines in the securities and real estate markets, and perceptions of these conditions that decrease the level of disposable income of consumers or consumer confidence; breaches in data security or other disturbances to our information technology and other networks or our actual or perceived failure to comply with requirements regarding data privacy and protection; changes in fuel prices and the type of fuel we are permitted to use and/or other cruise operating costs; mechanical malfunctions and repairs, delays in our shipbuilding program, maintenance and refurbishments and the consolidation of qualified shipyard facilities; the risks and increased costs associated with operating internationally; our inability to recruit or retain qualified personnel or the loss of key personnel or employee relations issues; our inability to obtain adequate insurance coverage; pending or threatened litigation, investigations and enforcement actions; any further impairment of our trademarks, trade names or goodwill; volatility and disruptions in the global credit and financial markets, which may adversely affect our ability to borrow and could increase our counterparty credit risks, including those under our credit facilities, derivatives, contingent obligations, insurance contracts and new ship progress payment guarantees; our reliance on third parties to provide hotel management services for certain ships and certain other services; fluctuations in foreign currency exchange rates; our expansion into new markets and investments in new markets and land-based destination projects; overcapacity in key markets or globally; and other factors set forth under “Risk Factors” in our most recently filed Annual Report on Form 10-K, Quarterly Report on Form 10-Q and subsequent filings with the Securities and Exchange Commission. Additionally, many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic, Russia’s invasion of Ukraine and the impact of general macroeconomic conditions. It is not possible to predict or identify all such risks. There may be additional risks that we consider immaterial or which are unknown. The above examples are not exhaustive and new risks emerge from time to time. Such forward-looking statements are based on our current beliefs, assumptions, expectations, estimates and projections regarding our present and future business strategies and the environment in which we expect to operate in the future. These forward-looking statements speak only as of the date made. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in our expectations with regard thereto or any change of events, conditions or circumstances on which any such statement was based, except as required by law.

Investor Relations & Media Contact

Jessica John (305) 468-2339 [email protected] [email protected]

____________________ 1 Subject to a springing maturity if certain liquidity conditions are not met 

Released December 9, 2022

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Big cruise companies can survive a shutdown lasting many months, Wall Street analyst says

The world's biggest cruise companies are unlikely to go bankrupt even if cruising doesn't resume for many months, says a top Wall Street analyst who has studied the industry for many years.

Leisure analyst Harry Curtis of Instinet on Tuesday said the three publicly traded companies that dominate the cruise world -- Carnival Corp., Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings -- have enough liquidity and borrowing capacity to survive with near-zero revenues into the first quarter of 2021.

"Many times we've been asked about bankruptcy, and we believe [the probability] to be low," Curtis said in a research note that included a lengthy analysis of the companies' financial positions.

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Carnival Corp. is the parent company of Carnival Cruise Line, Princess Cruises , Holland America, Seabourn and five brands based overseas. Royal Caribbean Cruises is the parent company of Royal Caribbean , Celebrity Cruises, Azamara and Silversea. Norwegian Cruise Line Holdings operates Norwegian Cruise Line as well as Regent Seven Seas Cruises and Oceania Cruises.

Together, the three companies account for more than 60% of all cruises taken worldwide.

All three companies have halted cruise operations since mid-March due to the coronavirus outbreak , resulting in a massive revenue drop and negative cash flow.

In a regulatory filing last week, Carnival Corp. said it was burning through $1 billion a month during the shutdown. The filing came as the company attempted to shore up its finances by selling more than $6 billion in stock and debt instruments -- a move it said gave it enough liquidity to meet its needs during a shutdown lasting at least as far as November.

While Carnival Corp. is making contingency plans for such an extended shutdown, Curtis doesn't expect the situation to be quite so dire. He said he's modeling a partial resumption of cruising by the middle of the third quarter of this year.

Related: Cruise ships could be put into storage for months due to coronavirus

Among his assumptions: New cases of the disease caused by the coronavirus, COVID-19, peak in the United States in the next two weeks, and cruise lines develop new health protocols that restore consumer confidence in boarding ships.

He's also betting that demand for cruises "is impaired but not obliterated" due to the recent weeks of negative headlines surrounding cruise ships experiencing coronavirus outbreaks.

Curtis noted the past resiliency of the industry, which has a strong base of hardcore fans. Cruising has bounced back strongly after such calamities as the 2012 sinking of the Costa Concordia.

While some people may have been turned off to cruising by recent developments, "there is a core base of customers that are and will be rebooking when the all-clear signal is sounded," Curtis said.

Related: CDC says cruisers were exposed to coronavirus on 28 sailings

People in general will be eager to get back to traveling after coronavirus travel restrictions are lifted, he added.

After many days of quarantine, "cabin fever (no pun intended) will be high," Curtis said. "Demand for social interaction and travel are likely to be at unprecedented levels."

Given such assumptions, Curtis thinks the major cruise companies could be able to get half their fleets back into operation during the second half of the year. Initially, they're likely to focus on close-to-home destinations such as the Caribbean and Alaska , he said.

Still, even with a partial restart to operations, revenues for the major cruise companies could be down 80% in the third quarter and 70% in the fourth quarter. For the ships that do operate, he's projecting occupancy levels as low as 60% in the third quarter. Cash flow could remain negative into the first half of 2021, Curtis said.

The major cruise companies normally run at occupancy levels of around 108%, achieving occupancy levels above 100% by filling so-called "third and fourth" berths in cabins -- pulldown bunks and pullout sofas that are in addition to the normal two berths per cabin.

Curtis said ticket prices could be down 25% to 30% on average after cruising resumes.

For now, most cruise lines only have canceled sailings through the middle of May . A few lines, such as Viking, have canceled trips through the end of June. But the lines have been canceling voyages in waves, about a month at a time. More cancellations are expected.

The timing of a resumption of cruises is the big wildcard right now in analyzing the industry's financial outlook, Curtis suggested.

A resumption of cruising is dependent on some factors outside of the cruise industry's control, such as when government travel restrictions are lifted, when ports begin reopening to cruise ships and when flights to cruise hubs resume enough to support cruise travelers. There also will be challenges around restaffing vessels. Lines have been sending crew home from some ships.

Still, the timing of all of these factors ultimately are driven by one big thing: The trajectory of COVID-19 cases.

"We believe the obvious unanswered question is when the COVID threat subsides enough so that travel resumes," he said.

Additional resources for traveling during the coronavirus outbreak:

• How to cancel or postpone a cruise due to coronavirus
• How coronavirus is impacting airline award availability
• How coronavirus has left the travel industry reeling
• Airlines scale back inflight offerings due to coronavirus
• How to ward off coronavirus in your hotel room
• Guide to traveling during the coronavirus outbreak

NCLH Probability of Bankruptcy

The Probability of Bankruptcy of Norwegian Cruise Line Holdings Ltd (NCLH) is 22.70% . This number represents the probability that NCLH will face financial distress in the next 24 months given its current fundamentals and market conditions.

Multiple factors are taken into account when calculating NCLH's probability of bankruptcy : Altman Z-score, Beneish M-score, financial position, macro environments, academic research about distress risk and more.

NCLH - ESG ratings

ESG ratings are directly linked to the cost of capital and NCLH's ability to raise funding, both of which can significantly affect the probability of Norwegian Cruise Line Holdings Ltd going bankrupt.

• Norwegian Cruise Line

NCL Bankruptcy?

By Cruise Kontrol , July 9, 2008 in Norwegian Cruise Line

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Cruise Kontrol

We are going on the Gem in April,a couple of friends have decided to join us-- but when they went to book the cruise at AAA they were told that AAA is no longer booking cruises w/ NCL because they are going bankrupt!!:eek: I find this hard to believe, and was wondering if anyone out there has heard the same. I've been on NCL 4 times already and was hoping to go many more times. Please tell me this is wrong!! Thanks.

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I haven't heard anything about this, so unless it's extremely recent news, I doubt if it's true. You might want to check out the following thread about AAA steering customers away from booking NCL:

http://boards.cruisecritic.com/showthread.php?t=797458

newmexicoNita

I am not a lawyer but I think statements like this are grounds for some sort of legal action. I would love to know what AAA company told them that. I think I would be tempted to challenge them. this is below the lowest of low....

AAA better watch out. This is the second time recently they have said this. Apollo investments just put 1 billion dollars into NCL. There is NO chance it will go bankrupt in the foreseeable future.

Some regional AAA's aren't booking because NCL refuses to pay additional tribute to AAA in the form of "special" enhanced commissions or other benefits. That is why they steer you to other cruise lines which have agreed to pay this bribe to them to do so(or so I have heard).

I think CC members who also belong to AAA (which I don't) need to contact their AAA local office and express their displeasure. Stongly!

they won't care. The AAA travel is a separate for profit arm....

A bunch of scum-suckin' pigs.

In order to have a AAA Club you must provide the three core components: Travel, Membership and Insurance. It is all under one company.

I think the best thing is just don't give AAA your cruise business.

I once checked with them on the price of a cruise I had already gotten a price for somewhere else. They were considerably more. When I told them I had a better price they said they would match it.

Even though they would match prices, I went with the other qoute on principle...just give me the best price to begin with.

While bankruptcy might not be in the immediate future, problems of another sort certainly are. When Apollo threw in $1Billion dollars in the latest agreement, there were strings attached. Here is an article referencing the potential future of NCL:

20.8.2007: NCL America's future to to be decided within 16 months

The future of NCL America, the loss-making US flag operation of NCL Corporation, will be decided within 16 months, Fairplay Daily News reports on its website. Apollo Management’s $1Bn equity offer for 50% of NCL Corporation includes a specific plan to either revive the US-flag NCL America operation or liquidate it within 16 months. “Obviously up until now, it [NCL America] has lost a lot of money,” said NCL president Colin Veitch during last Friday’s conference call. “So the partners have agreed to a period of time in which NCL’s new shareholding structure is not absorbing continuing losses from this operation, during which Star is underwriting the losses.” Consideration for the intra-Hawaii, US-flag assets is not included in Apollo's initial $1Bn equity infusion, but is being deferred until "the decision is made on whether we stay in the [uS flag] business,” said Veitch. “Both partners wish to continue – that’s what we’re aiming for," he maintained. NCL Corporation has decided earlier to reflag the 93,000 gross ton Pride of Hawaii from the US to the Bahamas and switch it to Norwegian Cruise Line (NCL) from NCL America. The ship will offer cruises from Europe next summer, including NCL's first programme targeting the UK market, with base in Southampton.

Fairplay is an International shipping weekly paper published in the UK.

Doing the math, the article is dated August 2007, so I guess some sort of decision should be forthcoming around December 2008.

I'm not particularly defending AAA on their decision about NCL...but, as a former travel agency owner/manager for many years, I can say that in my office, we never, ever did business with any company that was in any sort of financial difficulty at all. We owed it to our customers and clients to offer them only those tour arrangements that were backed up with strong, finanically viable companies. At the very first sign of money problems, we stopped using those vendors....

When a customer spends thousands of dollars on a cruise or a vacation, you want to make darned sure you sell them the very best and NOT risk their vacation dollars on any company where the finances are or might be questionable.

OK, my .02 worth.

While bankruptcy might not be in the immediate future' date=' problems of another sort certainly are. When Apollo threw in $1Billion dollars in the latest agreement, there were strings attached. Here is an article referencing the potential future of NCL:   [b']20.8.2007: NCL America's future to to be decided within 16 months[/b]   The future of NCL America, the loss-making US flag operation of NCL Corporation, will be decided within 16 months, Fairplay Daily News reports on its website. Apollo Management’s $1Bn equity offer for 50% of NCL Corporation includes a specific plan to either revive the US-flag NCL America operation or liquidate it within 16 months. “Obviously up until now, it [NCL America] has lost a lot of money,” said NCL president Colin Veitch during last Friday’s conference call. “So the partners have agreed to a period of time in which NCL’s new shareholding structure is not absorbing continuing losses from this operation, during which Star is underwriting the losses.” Consideration for the intra-Hawaii, US-flag assets is not included in Apollo's initial $1Bn equity infusion, but is being deferred until "the decision is made on whether we stay in the [uS flag] business,” said Veitch. “Both partners wish to continue – that’s what we’re aiming for," he maintained. NCL Corporation has decided earlier to reflag the 93,000 gross ton Pride of Hawaii from the US to the Bahamas and switch it to Norwegian Cruise Line (NCL) from NCL America. The ship will offer cruises from Europe next summer, including NCL's first programme targeting the UK market, with base in Southampton.   Fairplay is an International shipping weekly paper published in the UK.   Doing the math, the article is dated August 2007, so I guess some sort of decision should be forthcoming around December 2008.   I'm not particularly defending AAA on their decision about NCL...but, as a former travel agency owner/manager for many years, I can say that in my office, we never, ever did business with any company that was in any sort of financial difficulty at all. We owed it to our customers and clients to offer them only those tour arrangements that were backed up with strong, finanically viable companies. At the very first sign of money problems, we stopped using those vendors....   When a customer spends thousands of dollars on a cruise or a vacation, you want to make darned sure you sell them the very best and NOT risk their vacation dollars on any company where the finances are or might be questionable.   OK, my .02 worth.

FWIW this has been brought up before. "NCL AMERICA" is the Hawaii operation, currently POA, and not NCL in general. There is only one ship that could be impacted by any Apollo decision.

The quote is referring to NCL America, not NCL. There is a difference in the two. If NCL America does not become profitable, the last ship may be removed but this does not mean that NCL is in financial problems and should not be used. Just my .02 worth.

Apollo invested in NCLC Ltd., the parent company of both NCL and NCL America and hold a majority position on the board of directors. Where there are problems in one facet of a corporation, there is usually a problem elsewhere. From the Travel Agency point of view, the situation can be risky......for the entire company.

I wouldn't sell NCL right now if I still was in the business. If a client insisted, I would certainly explain that they would need to find another agency and I would offer to make a few phone calls on their behalf to find one....but, I wouldn't take their booking or their money. The risk to the agency is too high. Our society is too litigious...

salty dingo

I think if you book travel through AAA you are mentally bankrupt. That organization is a real has-been. Like the yellow pages. I can't remember the last time I picked up a phone book.

DizzyDallasDi

Just because one segment (NCL America) of a corporation (NCL Corporation Ltd.) is not profitable does not mean that the entire corporation is going down. In fact, it's not uncommon for a large business to have both profitable and unprofitable subsidiaries. NCL Corporation Ltd. is a publiic company and as such, must make full disclosure regarding their operations and finances to the SEC and its investors. If you are worried about the financial viability of NCL, you can read and learn all you'd ever want to know at http://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=1318742&filenum=&State=&SIC=&owner=include&action=getcompany.

Also, if NCL does file bankruptcy, you can get a copy of the petition from the court. All court filings are open to the public.

Your friendly paralegal,

Where there are problems in one facet of a corporation' date=' there is usually a problem elsewhere.[/quote'] And this sweeping opinion is informed by what analytical study?   I think what we have here is someone who thought he/she made a brilliant posting in citing that press release, was shown to be utterly uninformed in confusing NCLA with NCL, and subsequently attempted a lame recovery by making a generalization that has no basis. Brilliant.:rolleyes:

NowVoyager908

Just because one segment (NCL America) of a corporation (NCL Corporation Ltd.) is not profitable does not mean that the entire corporation is going down. In fact, it's not uncommon for a large business to have both profitable and unprofitable subsidiaries. NCL Corporation Ltd. is a publiic company and as such, must make full disclosure regarding their operations and finances to the SEC and its investors. If you are worried about the financial viability of NCL, you can read and learn all you'd ever want to know at http://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=1318742&filenum=&State=&SIC=&owner=include&action=getcompany.   Also, if NCL does file bankruptcy, you can get a copy of the petition from the court. All court filings are open to the public.   Your friendly paralegal, Diane :D

Deleted post. Sorry.

I didn't say that......I was simply trying to explain the situation from the Travel Agency point of view. No reputable travel office is going to do business with any company that is having any sort of difficulty - anywhere.....that includes airlines, hotels, cruises, tour companies and other vendors.

Your friendly Travel Consultant/Owner/Manager, Retired after 32 years in the business.

Once Apollo takes complete control, they can do whatever they wish with whatever ships there are. I am NOT saying they will go bankrupt, I am NOT saying they are going to stop operating.

I speak strictly from the Travel Agency point of view.....I would not book ANY company that wasn't 100% viable across the board...that includes all vendors...not just cruises. The risk to the Agency is simply to large. You can bet that when a tour company or cruise company or an airline stops operating or goes belly-up, the first place the customer goes is to the Travel Agency...and they are the first to get sued.... So, if AAA choses not to sell NCL, that is their right. They are simply CYA....and protecting their customers funds.

Retiring after 32 years as owner/manager of an agency, I've seen a lot of airlines, cruiselines and other vendors go and have seen the financial horror of fellow agents who have been sued and lost their shirts..... AAA isn't some dark, nefarious agency who is being mean to NCL...it is a business decision.

I didn't say that......I was simply trying to explain the situation from the Travel Agency point of view. No reputable travel office is going to do business with any company that is having any sort of difficulty - anywhere.....that includes airlines' date=' hotels, cruises, tour companies and other vendors.   Your friendly Travel Consultant/Owner/Manager, Retired after 32 years in the business. :D[/quote']   With all due respect, please refer to greywllow's posting above. Moreover, many reputable travel agencies do business with NCL. There are many major airlines with much worse financial problems than NCL but I'll bet my bottom dollar there's not one single travel agency out there that won't book you a flight on one of them.   Diane

I didn't say that......I was simply trying to explain the situation from the Travel Agency point of view. No reputable travel office is going to do business with any company that is having any sort of difficulty - anywhere.....that includes airlines' date=' hotels, cruises, tour companies and other vendors.   Your friendly Travel Consultant/Owner/Manager, Retired after 32 years in the business. :D[/quote']   So I guess reputable travel agents aren't booking tickets on United Airlines, Delta, Northwest. They are all in financial straights? Doubtful.

With all due respect, please refer to greywllow's posting above. Moreover, many reputable travel agencies do business with NCL. There are many major airlines with much worse financial problems than NCL but I'll bet my bottom dollar there's not one single travel agency out there that won't book you a flight on one of them.   Diane

Thanks for injecting some much needed common sense into this discussion. As you say, the airline industry is in a precarious state (actually, when isn't it on the verge of collapse) and I bet no TA is avoiding selling seats on any flights because of it.

AAA doesn't want to deal with NCL and I suppose that is their perogative. But to intimate that NCL is facing bankruptcy really is unprofessional and unethical in my book.

NCL and Southwest fit our lifestyle. You can enjoy the other lines if you wish; that's what's great about America!:D

ohioNCLcruiser

So I guess reputable travel agents aren't booking tickets on United Airlines, Delta, Northwest. They are all in financial straights? Doubtful.

Or Frontier, American, Usairways..

electricron

If NCL was going bankrupted, I doubt Apollo Management would have sunk $1 BILLION US dollars into NCL. I also doubt NCL could find banks to lend the $2 BILLION required to purchase the two new F3 class super sized ships.

As for the survival of NCLA in particular, that's been addressed already, long before the 16 months was up. The Pride of Aloha was pulled from Hawaii, its ownership apparently transferred to Star Cruises. The Pride of Aloha, now Norwegian Sky, is still on the appropriate websites up for sale by Star Cruises. Which means, imho, that until a sale happens, NCL is bareback leasing the Norwegian Sky from Star Cruises. That's why the Sky's itineraries don't stretch out into the future past next winter's Caribbean cruise season, while all other NCL ships do.

If you check into the Apollo Management buy-in of NCL more closely, you'll discover that if NCLA was broken up, including removing one ship from Hawaii service, which has happened, NCL retains the America for a much smaller price, and Star would gain ownership of the Aloha (now Sky). Why? Because Apollo didn't buy-in to NCLA. Of course, NCL could retain ownership of the Sky if they were willing to give Star Cruises close to $300 Million. Retaining the much newer America costs NCL around $100 Million, mainly because the banks still own it to a tune over $300 Million. So the decision about what to do with NCLA has already been settled, as far as the money owed who is concerned. Of course, later this year, NCL could still transfer the America fully into NCL and kill its NCLA group.

So, just because NCLA may disappear, it doesn't mean NCL is going bankrupted. There's hundreds of million dollars at state that actually encourages the break-up of NCLA. Which in reality per the buy-in agreement, has already happen.

Here's the deep, boring details of the Apollo Management deal into NCL.

http://www.sec.gov/Archives/edgar/data/1318742/000095014408001868/g11904exv4w49.htm

http://www.sec.gov/Archives/edgar/data/1318742/000095014408001868/g11904exv4w48.htm

In .....49.htm, read particularly Articles II and III.

It's legalize mungo jumbo, but it's all there in black & white.

p.s. The Texas AAA Travel Agency still books NCL cruises. So, whatever the rest of the AAA agencies do is questionable, imho.

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