Exclusive: Norwegian Cruise taps Goldman Sachs to
explore stake sale - sources
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[April 18, 2020] By
Joshua Franklin and Greg Roumeliotis
(Reuters) - Norwegian Cruise Line Holdings
Ltd <NCLH.N> has hired investment bank Goldman Sachs Group Inc <GS.N> to
explore financing options that could include the sale of a stake in the
company, people familiar with the matter said on Friday.
Norwegian's attempt to bolster is finances comes as cruise operators
have been forced to suspend their operations due to the novel
coronavirus outbreak. They have been left out of a $2.3 trillion
stimulus package that U.S. lawmakers have adopted to support the economy
and provide aid to troubled companies.
Among the options Norwegian Cruise is considering is a stake sale known
as private investment in public equity (PIPE), the sources said. The
company is in talks with several private equity firms about a PIPE deal,
the sources added.
The sources, who requested anonymity as the deliberations are
confidential, cautioned that no deal is certain. Norwegian Cruise did
not immediately respond to a request for comment. Goldman Sachs declined
to comment.
Several companies have turned to PIPE deals in recent weeks to bolster
their finances, including car e-commerce platform Carvana Co <CVNA.N>,
payment firm EVO Payments Inc <EVOP.O>, and online real estate broker
Redfin Corp <RDFN.O>.
Cruise lines have been rushing to bolster their cash coffers through
equity and debt offerings following the onset of the COVID-19 pandemic,
which led to outbreaks on several ships.
Earlier this month, Carnival Corp <CCL.N>, the world's largest cruise
operator, raised $6.25 billion by issuing new debt and equity to
investors, while Royal Caribbean Cruises Ltd <RCL.N> clinched a $2.2
billion loan last month.
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A Goldman Sachs sign is displayed inside the company's post on the
floor of the New York Stock Exchange (NYSE) in New York, U.S., April
18, 2017. REUTERS/Brendan McDermid
Saudi Arabia's Public Investment Fund disclosed earlier this month that it had
amassed an 8.2% stake in Carnival.
Norwegian Cruise, the world's third-largest cruise operator, has lost almost
four-fifths of its market value this year, as it grounded its 28-ship fleet to
help contain the spread of the virus.
The Miami-headquartered company, which also operates Oceania Cruises and Regent
Seven Seas Cruises, disclosed last month it had drawn down on $1.55 billion of
new and existing credit lines. As of the end of December, Norwegian Cruise had
disclosed long-term debt of close to $6.9 billion.
"This liquidity is sufficient to cover expected cash needs over the balance of
the year, but the cushion will be modest given any further deterioration in
earnings," credit ratings agency Moody's Investors Service Inc analysts wrote
about Norwegian Cruise's finances on March 31.
The U.S. Centers for Disease Control and Prevention on April 9 extended its "no
sail order" for all cruise ships for up to 100 days. The cruise industry is
currently working on a proposal to submit to the CDC, which will include
enhanced sanitization and health safety protocols, according to industry trade
group CLIA.
(Reporting by Joshua Franklin and Greg Roumeliotis in New York; Editing by
Daniel Wallis)
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