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Norwegian Cruise Line tanks 24% after warning investors it has 'substantial doubt' it can keep operating (NCLH)

The Norwegian Encore cruise ship at the Port of Miami.
  • Shares of Norwegian Cruise Line tanked as much as 24% on Tuesday after the company said in an SEC filing that there was "substantial doubt" about its ability to continue operating as it faces a liquidity crunch.
  • The coronavirus pandemic has sent shockwaves through the travel industry, with many cruise lines canceling trips through June.
  • The company said it expected to report a net loss for both the first quarter and all of 2020.
  • Visit Business Insider's homepage for more stories.

Shares of Norwegian Cruise Line Holdings tanked as much as 24% on Tuesday after the company said in a Securities and Exchange Commission filing that there was "substantial doubt" about its ability to continue operating as it faces a liquidity crunch.
Norwegian's audit firm included a new risk factor related to the coronavirus in its company filing: "COVID-19 has had, and is expected to continue to have, a significant impact on our financial condition and operations, which adversely affects our ability to obtain acceptable financing to fund resulting reductions in cash from operations."
The company continued: "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."
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The company said the factors above, in combination with debt maturities and other obligations over the next year, led it to believe that there is "substantial doubt" about its "ability to continue as a going concern," as it "does not have sufficient liquidity to meet its obligations over the next twelve months, assuming no additional financing."
Norwegian filed a shelf registration to raise an undetermined amount of money, giving the cruise-line operator another option to raise cash if it needs to.
As of December 31, the company held about $6 billion in long-term debt obligations.
Additionally, Norwegian said it did not expect to make any money in 2020.
Shares of Norwegian traded down as much as 24%, to $11.03, on Tuesday. Year-to-date, the stock is down more than 80%.
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* This article was originally published here Press Release Distribution

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