philipb

On 8/21/2021 at 4:39 PM, TLCOhio said:

But for the bigger, more long-term view of Silversea and Royal  Caribbean and their future/survival, that is less than one-third capacity for the Muse.  How can the cruise lines survive financially with that kind of passenger load?

They can't.

From the Wall Street Journal this past week, they had a press release with this headline: “Royal Caribbean Group announces proposed offering of senior unsecured notes” and these highlights:  "Royal Caribbean today announced that it has commenced a private offering of $1,000,000,000aggregate principal amount of senior unsecured notes due 2026.  The Company intends to use the proceeds from the sale for general corporate purposes, including the replenishment of capital as a result of the up to 40% redemption of its 11.500% Senior Secured Notes Due 2025 and the refinancing of future debt maturities.”

Who on earth would subscribe to these 'junk' bonds? It just goes to show that lessons from previous financial disasters have still not been learned. I am thinking of all that sub-prime lending a decade and more ago which resulted in the financial crash of the late 2000s.

It is interesting that the re-fit is now being done in Poland, and I suspect this was a decision made on cost grounds. Well, at least it is being done after two (or is it three?) postponements due to the pandemic. I hope that the refurbishment is up to the standards employed when Silver Cloud was re-fitted. We thoroughly enjoyed our three expedition cruises on her in 2018 and 2019. They were unmissable experiences!

The RCCL share price currently prices in a full recovery to profitable trading. Way too optimistic in my view. The current stockmarket capitalisation of RCCL is $18.5bn. The balance sheet value at 30 June 2021 was $7.9bn according to RCCL's latest press release. If the shares traded at net asset value they would be around $30 - not $71. As an investor I would steer well clear of investing in any of the 3 major cruise operators.

15 hours ago, Stumblefoot said:

Thankfully, money remains super cheap and readily available.
 

 

But unlike governments, there is a limit to how much an ailing business can borrow. This is how I think it could play out:

The re-start of mainstream cruising will continue to be delayed in 2021 to the point where the 'Big 3' cruise companies no longer have sufficient working capital to remain afloat. The 'cash burn' will continue and we could see the big corporations filing for bankruptcy (in whichever jurisdiction they may reside). In this event, the secured lenders will either convert their debt for equity (wiping out existing shareholders in the process) or sell their secured assets (principally the ships) to the private equity investors who will be circling like vultures. Newer ships will survive under new ownership (possibly using existing trading names to retain passenger loyalty) and older tonnage will go for scrap to the beaches of Turkey, India or wherever. The industry will shrink, as a result. As regards newbuilds, the new investors can either renegotiate existing contracts or walk away depending on how the numbers stack up. To be left with a half-built ship is not an attractive proposition for the shipbuilder and so again the new investors will have bargaining power. In all of these scenarios existing shareholders are likely to end up with little or nothing.

Terry - you might like to bookmark this post and come back to it on 31 December 2021 and see how much of my analysis has proven correct!

Well, now we have it. The re-fit is deferred yet again (I imagine because of the cost considerations) and the Wind schedules do not appear to begin until November.

19 hours ago, Randyk47 said:

   I suspect some deep pocket entities are watching this very closely and getting ready to acquire piece parts if not whole companies at a bargain rate.   

If RCCL does go bust might just Manfredi Lefebvre be standing by ready to re-acquire Silversea? There's a thought.

In the meantime, back to the topic of this thread. I think the Spring '21 conversion (or delay thereof) of Silver Wind will be an acid test of just how strained the finances are at RCCL.

30 minutes ago, Randyk47 said:

I can’t but wonder if much or some of the planned itineraries aren’t going to have to slide to later dates.   While the vaccine or vaccines seem almost ready to start being used it is going to take months and months to reach a sufficient and significant part of the world population.   Despite what I think will be potentially a monumental effort you can only do so much so fast.   Add that if airlines, cruise lines, and countries potentially  require proof of vaccination to travel or visit you could see the supposed pent up demand dampened.   The next two to three months are going to be critical as to the pacing of the distribution of vaccines and will give us a projection for the following months and in turn a return of cruising whatever that might look like.   

A perfect summation of the situation which echo my thoughts exactly. The problem then becomes how long the major cruise companies can survive. Their currently stressed balanced sheets could reach breaking point in the second half of 2021. At which point the vultures will circle.

Silver Moon's formal handover took place yesterday. Such a pity she has nowhere to go (with passengers, that is).

https://www.cruisecritic.co.uk/news/5697/

As the months pass I cannot see the Silver Wind refit happening in Q1/Q2 2021, purely on financial considerations.

7 hours ago, Stumblefoot said:

That is just shocking to read to think Australia may be over a year away from opening to the international community.

Australia is rightly being very cautious.

12 hours ago, tgh said:

Jim Walker (Cruise Law News) has named the elephant.. it is called Ponzi...

 

Carnival is essentially running a quasi-Ponzi scheme, he said.

"It is collecting money for new cruises, which will probably not take place, to be used to eventually refund fares which Carnival owes to it's customers for the past several months."

 

I opine that this may turn out to be one of the biggest consumer rip offs  ever….is anybody listening ?

There is a sense of despair here in Au about the state of the US and the functional IQ of many of it's constituents.. very sad times….

 

 

I had forgotten the expression 'Ponzi scheme' but you are absolutely right in your assessment (as Is Mr Jim Walker). "It will all end in tears", as the saying goes. The Wall Street analysts are ignoring the Elephant in the Room!

6 hours ago, alexandria said:

Considering that the first recommendations from the cruise industry were just released on Monday, I can certainly forsee a scenario where it is at least another four to six months before US cruises resume while all of this is hashed out.

 

I think we shall continue to see month-by-month cancellations by SS and the other cruise lines and that mid-2021 is the absolute earliest that cruising might re-commence. Rather a lot hangs on the spread of Covid-19 in the Northern Hemisphere winter, and how long the cruise lines can survive financially. And, of course, whether a vaccine comes on-stream.

8 hours ago, Tothesunset said:

Every time a new batch of cancellations is made I can't help but feel some despair for all the SS employees that are seeing their livelihoods being slowly strangled. 

 

And also the knock-on effect to the families in places like the Philippines whose income largely derives from their relatives at sea. I can't really get too upset about missing a cruise or two (and getting my money back) when I remember the hardship being faced by so many in the industry. It's heartbreaking. 

I quite agree.

It looks like the Red Sea charter cruises may be underway again. Silver Spirit left King Abdullah Port at 19.27 on 17 September since when she has been to somewhere up the coast called Ar Rayis. The ship is now southbound again and due back at King Abdullah at 06.00 Sunday (source: Marine Traffic). It is stinking hot in the Red Sea at this time of year with temperatures relentlessly in the high 30s. I feel so sorry for the poor crew. It must be ghastly.

It's simply to preserve cash for as long as possible, before having to make refunds. No other reason.

2 hours ago, cruiseej said:

Carnival is aiming to sell $1 billion in stock. They're burning $770 million each month. So this stock sale would buy them 6 weeks of losses? Well that doesn't seem good. How useful is 6 more weeks when they need 6 more months of cash?

The prospect of the three major cruise companies surviving is looking increasingly remote. Their balance sheets are under considerable strain. 

I feel so sorry for the poor crew. Are they confined to the ship? I cannot imagine that shore leave will be possible for them. Or am I wrong?

On 8/29/2020 at 7:41 PM, greykitty said:

And returned to port....at least every sailing on every line provides info for regulators and all the lines.

 

https://english.alarabiya.net/en/coronavirus/2020/08/29/Coronavirus-Cruise-ship-in-Saudi-Arabia-returns-after-suspected-COVID-19-case

Not a good start. I hope the passengers on these cruises treat the crew with the civility they are used to from Westerners. 

6 minutes ago, TLCOhio said:

 

Appreciate the posting of this BBC "Breaking News" and the various follow-ups.  But the March 2022 date is not quite correct.   It's March 2021!!

 

From the BBC today, they had this headline: “Coronavirus: Cunard cruises suspended until March” with these highlights: “The suspension of Cunard cruises has been extended until March due to the coronavirus pandemic. It means the Southampton-based company, which is part of the Carnival group, will have paused operations for an entire year. All sailings have been cancelled for Queen Elizabeth until 25 March, Queen Mary 2 until 18 April, and Queen Victoria until 16 May.  Mr Palethorpe said all of next year's Queen Elizabeth's sailings in and around Australia, Japan and Alaska would be replaced with 'shorter duration European holidays ranging from three to 14 nights'.”

 

Also of significant importance this morning,, there were several major news stories that raise legitimate questions as to how long any such vaccinations would provide protection.  From ABC TV news, they had this headline: “1st documented COVID-19 reinfection isn't surprising, but may offer important clues about virus, experts say” with these highlights: “Back in March, a 33-year old man from Hong Kong came down with a fever and a cough.  He spent two weeks in a hospital battling COVID-19, but by mid-April he had recovered.  In August, the man traveled to Spain, stopping for a layover in the United Kingdom. When he returned home to Hong Kong, he tested positive for the virus, again. The second time around, however, the man felt fine.  He didn't feel sick, but he was. He may have been symptom-free, but COVID-19 was back in his system. In what scientists are calling the world's first documented reinfection, researchers in Hong Kong are telling and investigating the story of the man, who seemingly recovered from the virus, only to become infected again, nearly five months later. Specialists interviewed by ABC News are urging the public not to panic, noting that reinfection was always a possibility, just like the common cold.  Specialists said reinfections like this are probably still rare, and one man's experience with COVID-19 is unlikely to be the average person's experience.”

 

Full stories at:

https://www.bbc.com/news/uk-england-hampshire-53904221

https://abcnews.go.com/Health/1st-documented-covid-19-reinfection-surprising-offer-important/story?id=72585026

 

THANKS!  Enjoy!  Terry in Ohio

 

Athens & Greece: Many visuals, details from two visits in a city with great history, culture and architecture.  Now at 36,185 views.

http://boards.cruisecritic.com/showthread.php?t=1101008

Sorry Terry, my ham-fisted typing (and poor eyesight - currently awaiting eye surgery to replace lens in my left eye, next month!)

31 minutes ago, philipb said:

Cunard suspends all sailing plans before March 2021:

 

https://www.bbc.co.uk/news/uk-england-hampshire-53904221

 

I expect other major cruise lines to follow suit.

Sorry mis-typed date which should read 2021 not 2022

Cunard suspends all sailing plans before March 2022:

https://www.bbc.co.uk/news/uk-england-hampshire-53904221

I expect other major cruise lines to follow suit.

10 hours ago, UKCruiseJeff said:

 

A rather alarming fact is that if we are to believe in the value of companies then the current value of Apple is more than the total value of all of the FTSE100 listed companies combined.

The UK National Debt stands at £1.8 trillion. The market cap. of Apple is $2.15 trillion (equals £1.64 trillion). So if the UK government owned Apple it could pay off our National Debt. In full. How extraordinary is this?

4 hours ago, worldtraveller99 said:

So sorry to hear that philipb. So they didn't mind you cancelling the cruise, and still gave you a refund? I thought we always had to wait for them to cancel us for that - we took the FCC and postponed our 2020 Alaska cruise to July 2021. If that doesn't go I shall be very unhappy. 

If you give at least 120 days notice you get a full refund minus £130 (in the UK) administration charge.

1 hour ago, clo said:

Did you prepay in full to get a 10% discount? I booked ours after COVID had raised its ugly head and there was no way I was going to risk that much money if they wound up in bankruptcy.

Yes, we booked way back in 2019 when money lent to Silversea seemed as good as money in the Bank. How times change!