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Carnival borrows $3 billion cash for needed working capital

PortandTerminal.com, March 17, 2020

Carnival’s share price is at a 23-year record low, closing at $14.57 yesterday. In the past 12 months, the shares are down 75% from their high of $57.69.

MIAMI, FL – Carnival Corporation announced in a filing on Monday that it will borrow $3 billion for six months to meet its liquidity obligations in light of the current uncertainty in the global markets resulting from the COVID-19 outbreak. Carnival said the funds from the credit facility will be used for working capital, general corporate and other purposes.

Carnival said in the filing that the ongoing effects of COVID-19 on its global bookings and operations will have a material negative impact on its financial results and liquidity, and that is taking additional actions to improve its liquidity, including capital expenditure and operating expense reductions, and pursuing additional financing.

Given the uncertainly of the situation, the Corporation is currently unable to provide an earnings forecast, however we expect results of operations for the fiscal year ending November 30, 2020 to result in a net loss.

Statement from Carnival Corp (March 16, 2020)

Carnival’s share price is at a 23-year record low, closing at $14.57 yesterday. In the past 12 months, the shares are down 75% from their high of $57.69.

Share chart for Carnival Corp

Due to the spread of the virus and recent developments, including port restrictions related to the outbreak, Carnival previously announced that all of its brands have temporarily paused their cruise operations.

The full impact, according to Carnival, will be determined by the length of time the event influences travel decisions. And given the uncertainly of the situation,

Carnival said it is currently unable to provide an earnings forecast, however, it expects results of operations for the fiscal year ending November 30, 2020, to result in a net loss. That would be the first net annual loss for the company since it went public in 1987, according to Cruise Industry News’ Financial Tracking Report.

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