NEW YORK - Royal Caribbean Cruises, which has seen its stock take a big drop in the wake of the coronavirus outbreak, is borrowing a whopping $2.2 billion in secured loans to bolster its liquidity.
Including this new financing, the company has over $3.6 billion of liquidity comprised of cash deposits and its existing undrawn revolving credit facilities (net of outstanding commercial paper). In addition, the company has committed financing for all of its new ships on order.
The one-year loan can be extended for an additional year.
"This is a period of unprecedented disruption for the cruise industry," said Jason T. Liberty, executive vice president and CFO. "We continue to take decisive actions to protect the company's financial and liquidity positions as they enable us to keep focused on our guests, our crew and our long-term plans."
The company had previously announced a $500 million dollar loan.
The entire industry has been under pressure due to high profile cases of coronavirus being connected to ships. Royal Caribbean's stock has lost more than half of its value this year.
The industry was further damaged when the State Department recommended that "U.S. citizens, particularly travelers with underlying health conditions, should not travel by cruise ship."
Most of the industry then shut down for a minimum of 30 days. That period is widely expected to be extended.
The company had previously said that its 2020 guidance did not include the impact of the COVID-19 coronavirus outbreak.
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Royal Caribbean Cruises runs Royal Caribbean International, Celebrity Cruises, Azamara and Silversea Cruises and is also a 50% joint venture owner of the German brand TUI Cruises and a 49% shareholder in the Spanish brand Pullmantur Cruceros.
Together these brands operate a combined total of 61 ships with an additional 17 on order.