RCL Raises $1B

[tert333]

RCL has announced today that it is raising an additional $1B through share offering and convertible notes.    The shares have had a rebound over the past few weeks.   This is a good thing to get more liquidity.   Cash is king in times like these. 

 

https://www.cruiseindustrynews.com/cruise-news/23671-royal-caribbean-raising-1-billion-in-cash.html

[TeeRick]

1 hour ago, tert333 said:

RCL has announced today that it is raising an additional $1B through share offering and convertible notes.    The shares have had a rebound over the past few weeks.   This is a good thing to get more liquidity.   Cash is king in times like these. 

 

https://www.cruiseindustrynews.com/cruise-news/23671-royal-caribbean-raising-1-billion-in-cash.html

Good for them if it helps them survive.  Investors must be hopeful that the cruise industry will get restarted soon.

 

Cash might be king.  But the Piper will need to be paid at some point.

[Sam.Seattle]

Cash is King....

Debt is a Drag.....

ROYAL CARIBBEAN CRUISES LTD

62.27 -7.56 (-10.8263 %)  as of 7:50am PST 10-13-2020

Edited October 13, 2020 by Sam.Seattle
reduced font size

[Life Buoy]

-8.23 @ 12;40 ET

[Baron Barracuda]

Hopefully this is just RCL opportunistically using rebound in stock price to increase cash cushion and not indication they expect lengthier shutdown.  Stock sale dilutive for current shareholders but $60 is better than $0 if they run out of cash.   Investors not too hopeful though, stock down $9 (13%).    

[RICCruisers]

So an additional $1B will keep them “afloat” for an additional 4  months considering the have a cash burn rate of $250M per month. 

[mnocket]

We are watching an industry that is literally fighting for survival.  

Edited October 13, 2020 by mnocket

[elaineb]

1 hour ago, mnocket said:

We are watching an industry that is literally fighting for survival.  

And it is so hard to watch.

[grandgeezer]

I find it ironic that a few days after an article stating that the cruise lines have enough cash to last most of 2021, RCL feels the need to add $1,000,000,000 to their cash stash, and it's only the middle of October 2020. Maybe it's their way of saying this is going to last a lot longer than people are led to believe.

[gerelmx]

What percentage of the RC group's shares is on the market?

[Arizona Wildcat]

2 hours ago, gerelmx said:

What percentage of the RC group's shares is on the market?

Am not sure what you are asking.  RCL is issuing about 8M new shares ($500M worth).  215M outstanding according to NASDAQ.  These are new shares.

With two of the largest COVID vaccine trails on hold looking like 2021 till a vaccine approved.  Unlikely for cruising to resume for some weeks.

Edited October 14, 2020 by Arizona Wildcat

[RICCruisers]

1 hour ago, gerelmx said:

What percentage of the RC group's shares is on the market?

They are planning to offer $500,000,000 in stock. They don’t list the offering price, but at $60.00 per share which is about what it closed at today that is 8,333,333 shares. There are currently about 215,000,000 shares out. This is an increase of about 3.9% in the number of shares. It will dilute the existing value some when and if they reinstitute their dividend. 

[RICCruisers]

3 minutes ago, Arizona Wildcat said:

Am not sure what you are asking.  RCL is issuing about 8M new shares ($500M worth).  215M outstanding according to NASDAQ.  These are new shares.

With two of the largest COVID vaccine trails on hold looking like 2021 till a vaccine approved.  Unlikely for cruising to resume for some weeks.

 

You just beat me!

[TeeRick]

14 hours ago, grandgeezer said:

I find it ironic that a few days after an article stating that the cruise lines have enough cash to last most of 2021, RCL feels the need to add $1,000,000,000 to their cash stash, and it's only the middle of October 2020. Maybe it's their way of saying this is going to last a lot longer than people are led to believe.

Yes agree.  But maybe not surprising.  Even if they start cruising in Dec - Jan time frame, it will be very limited.  Reduced capacity onboard so a lot less revenue and profit, maybe they even operate cruises at a loss for a while just to get things going again.  The real question for them as a public corporation is when can they return to profitable cruising.  This is definitely different than just a return to cruising for us passengers.  So they need money to match their monthly burn rate even if the cruising resumes.

[fstuff1]

21 hours ago, RICCruisers said:

So an additional $1B will keep them “afloat” for an additional 4  months considering the have a cash burn rate of $250M per month. 

 

well, this article says rcl had $3B cash before the $1B stock dilution:

https://www.cruisehive.com/royal-caribbean-issues-update-detailing-difficult-financial-status/42615

 

so $4B cash @ $250M/month burn rate = 16months (1yr 4 months) survival

so till feb 2022

[RICCruisers]

59 minutes ago, fstuff1 said:

 

well, this article says rcl had $3B cash before the $1B stock dilution:

https://www.cruisehive.com/royal-caribbean-issues-update-detailing-difficult-financial-status/42615

 

so $4B cash @ $250M/month burn rate = 16months (1yr 4 months) survival

so till feb 2022

That is correct, which is why I said an additional 4 months. Could this additional 4 months be an indicator of how RCG is actually forecasting the length of time before they get back to cruising?

 

It was reported today that some of the $500M of new debt will used to pay off some of their current debt that is due this year for debt that will be due in 2023. The new debt will be at a rate of 2.875% vs. the debt being paid off is at a rate of 2.650%. This also will give the more breathing room. 

 

 

[mnocket]

1 hour ago, fstuff1 said:

 

well, this article says rcl had $3B cash before the $1B stock dilution:

https://www.cruisehive.com/royal-caribbean-issues-update-detailing-difficult-financial-status/42615

 

so $4B cash @ $250M/month burn rate = 16months (1yr 4 months) survival

so till feb 2022

16 months to turn cash flow positive - that's  going to be quite a challenge. 

[Baron Barracuda]

1 hour ago, fstuff1 said:

 

well, this article says rcl had $3B cash before the $1B stock dilution:

https://www.cruisehive.com/royal-caribbean-issues-update-detailing-difficult-financial-status/42615

 

so $4B cash @ $250M/month burn rate = 16months (1yr 4 months) survival

so till feb 2022

$300mm of the new cash will be used to repay existing debt maturing next month.  RCL has an additional $1.3B of debt maturing next year which will need to be repaid or refinanced.  This is above and beyond the $250mm/month cash burn so cash will run out sooner than 2/22.   

 

Also note that the $500MM in new notes are convertible into common stock at roughly $82/sh.  A good amount of the debt issued earlier this year is also convertible.  So on a fully diluted basis they have a lot more than 215MM shares outstanding.

[Ride-The-Waves]

This just simply means higher future prices for the same cabin and service,  NOT a good thing at all.

[Baron Barracuda]

3 hours ago, Ride-The-Waves said:

This just simply means higher future prices for the same cabin and service,  NOT a good thing at all.

They can't charge more than people are willing to pay.  Airlines are also hemorrhaging cash but the fares I've looked at are down substantially from last year.

[nocl]

21 hours ago, Arizona Wildcat said:

Am not sure what you are asking.  RCL is issuing about 8M new shares ($500M worth).  215M outstanding according to NASDAQ.  These are new shares.

With two of the largest COVID vaccine trails on hold looking like 2021 till a vaccine approved.  Unlikely for cruising to resume for some weeks.

one, the Astra Zeneca is on hold, the J&J trial is paused. one is regulatory authority directed (hold) the other is part of the protocol while the data and safety board looks at an event.