CCL offers another 1 Billion in common stock :(

[mcrcruiser]

Candidly I have found  in its   history  that Carnival  Corp  is far more devious  that heir rivals  when it comes to these financing  deals

[Sir PMP]

5 minutes ago, mcrcruiser said:

This type of lining ones pockets is nothing new with the top of the    pyramid  

Interesting.

[Sir PMP]

Basically another sign that they are sinking.

[BermudaBound2014]

8 minutes ago, mcrcruiser said:

Candidly I have found  in its   history  that Carnival  Corp  is far more devious  that heir rivals  when it comes to these financing  deals

 

Please share some examples....

[mcrcruiser]

1 minute ago, BermudaBound2014 said:

 

Please share some examples....

The time Micky the chairman at that time broke the deal that RCL had to buy Princess cruise line .He   planed the deal break where RCL wound up getting a paltry   35 million for the break up  .  with out the Princess line reputation CCL will never have been the company  they  became before the pandemic  .so just imagine  how the management of RCL felt loosing Princess  . 

I am sure if I dug into the financials I could come  up with other examples  but ,if you are curious please have at it  . 

 

 All I did was take out with my insurance default /BK  to protect my investment for my 2 Holland Cruises . My other 4 cruises are with Celebrity & RCL ships 

 

 I truly like HAL cruise line & hope it survives  in it's very long sea faring traditions  . CCL like all big corporation s are in it to get what ever they can get out of it & the top people "never " get hurt or the shaft 

[Mary229]

2 hours ago, mcrcruiser said:

anyof the  financing   instruments carry high  interest charges  .This gives  CCL the cash to operate but at a high debt service cost  .Now compare  the issuing  of   new billions of shares that pay no dividends  ,now this is free money & no strings attached .That is the difference between  issuing new  shares any other debt  instruments   .Today Wednesday ,Oct 19  ,2022 CCL stock futures have turned red 

🤷🏻‍♀️

[kangforpres]

Of the Big 3: CCL, NCL and RCL which is most likely to enter bankruptcy first when this long awaited recession starts? I'm assuming they all have the protections of the "soft" US. corporate bankruptcy laws which allow them to keep operating while settling with debt holders.

 

Hmm.. starting to think what that HAL "Have it All Bankruptcy protection" sale will include?

 

-Paul

[BermudaBound2014]

3 minutes ago, kangforpres said:

Of the Big 3: CCL, NCL and RCL which is most likely to enter bankruptcy first when this long awaited recession starts? I'm assuming they all have the protections of the "soft" US. corporate bankruptcy laws which allow them to keep operating while settling with debt holders.

 

Hmm.. starting to think what that HAL "Have it All Bankruptcy protection" sale will include?

 

-Paul

 

I think NCLH will call uncle first. They are the smallest by a good bit and Del Rio accepting the huge pay increase when the shareholders voted against it leaves an extra bad taste in my mouth. I also believe all three will be forced into some type of restructuring. The debt is just too large to manage. Even if cruise lines return to 2019 profitability, I don't believe they can make interest only payments. 

[Mary229]

Just now, BermudaBound2014 said:

 

I think NCLH will call uncle first. They are the smallest by a good bit and Del Rio accepting the huge pay increase when the shareholders voted against it leaves an extra bad taste in my mouth. I also believe all three will be forced into some type of restructuring. The debt is just too large to manage. Even if cruise lines return to 2019 profitability, I don't believe they can make interest only payments. 

I think there will be merger, consolidation and de-acquisition before there will be bankruptcy in the big 3.  Bankruptcy will be around the edges of the industry first 

[BermudaBound2014]

4 minutes ago, Mary229 said:

I think there will be merger, consolidation and de-acquisition before there will be bankruptcy in the big 3.  Bankruptcy will be around the edges of the industry first 

 

Agreed. restructuring at it's finest. 

[Sir PMP]

6 minutes ago, BermudaBound2014 said:

 

I think NCLH will call uncle first. They are the smallest by a good bit and Del Rio accepting the huge pay increase when the shareholders voted against it leaves an extra bad taste in my mouth. I also believe all three will be forced into some type of restructuring. The debt is just too large to manage. Even if cruise lines return to 2019 profitability, I don't believe they can make interest only payments. 

Restructure is their only way out.

[Guest ldtr]

1 hour ago, mcrcruiser said:

Candidly I have found  in its   history  that Carnival  Corp  is far more devious  that heir rivals  when it comes to these financing  deals

Devious in what way?

 

They have certainly followed SEC rules in disclosing the details in their 8k filings. The practice of creating a holding company subsidiary for individual ships or groups of ships is not uncommon in the industry.  Neither is taking out loans by subsidiaries.

 

So how exactly are they being devious.

[Guest ldtr]

9 minutes ago, Sir PMP said:

Restructure is their only way out.

That only becomes a possibility if they demonstrate that they can be cash flow positive on operations post the pandemic, which they have not yet done. According to their most recent filings they are getting close. On the other hand, if they get back to pre covid occupancy levels (about 12%) higher than last quarter, they will not only be cash flow positive on operations, but will actually turn profitable, even with the debt levels.

 

It all comes down to occupancy levels.  Though the debt levels will be a drag on the Financials for the next decade.

[BermudaBound2014]

On 10/18/2022 at 4:27 PM, Gail & Marty sailing away said:

Please post if you find out. 

 

I don't know which exact ships but did see this....

 

https://www.cruisemapper.com/news/11009-carnival-cruise-line-borrowed-2bn

 

 

[Mary229]

32 minutes ago, BermudaBound2014 said:

 

I don't know which exact ships but did see this....

 

https://www.cruisemapper.com/news/11009-carnival-cruise-line-borrowed-2bn

 

 

That highlighted passage could be interpreted in a number of ways.  I doubt these are new ships as those are still encumbered with loan provisions.  

[blueexpedition29]

2 hours ago, Mary229 said:

That highlighted passage could be interpreted in a number of ways.  I doubt these are new ships as those are still encumbered with loan provisions.  

Mary,et al - i read the "operational" to mean that they were brought back into service, not that they are "new" ships, which i agree would likely still be "encumbered". This helps the security of the lenders as they are in service and revenue producing in the event of default and become owned by the lenders in event of default.  The big question is which specific ships these are! 

[Mary229]

42 minutes ago, blueexpedition29 said:

Mary,et al - i read the "operational" to mean that they were brought back into service, not that they are "new" ships, which i agree would likely still be "encumbered". This helps the security of the lenders as they are in service and revenue producing in the event of default and become owned by the lenders in event of default.  The big question is which specific ships these are! 

That would be my interpretation.  I would love to see the actual list.

[mcrcruiser]

10 hours ago, ldtr said:

Devious in what way?

 

They have certainly followed SEC rules in disclosing the details in their 8k filings. The practice of creating a holding company subsidiary for individual ships or groups of ships is not uncommon in the industry.  Neither is taking out loans by subsidiaries.

 

So how exactly are they being devious.

See my post above 

[mcrcruiser]

We won;'t speculate   which of the big 3  will go into BK or reorganize  first ,2nd ie . That simply is a guessing game . what is important will be if & when a cruise line files BK & protection  for reorganizing what happens  to deposits on the cruises ?  for  people who are physically sailing are they told to get off the ships some where in a foreign land ?  These seem to me to me the most important questions  going forward 

 

So mow folks can speculate on the above  possibilities

[HappyInVan]

Who will fold first? The market has an opinion. Right now, RCL has a higher market capitalization than CCL, even though revenues are much lower. Historically, CCL had rated higher than RCL in proportion to the differences in revenues. Today, even NCL is favoured by the stock market over CCL.

[mcrcruiser]

So what happens to the  pax on board a cruise if a cruise  line files for BK i filed when a ship is on it's   itinerary cruising  ? 

[Guest ldtr]

1 hour ago, mcrcruiser said:

See my post above 

That devious too funny.

 

First of all Princess had been previously purchased by P&O, forming P&O Princess a UK company.  RCL made an unsolicited offer for P&O.  At that time the deal was strictly up to the board of directors of both companies and their shareholders.  If that deal had gone forward it would have been a merger with P&O owning slightly more than 50% of the combined company.  At that point CCL had no more ability to control the deal than any other company or investor with enough money.  That deal did not exactly go smoothly with several hurdles.  

 

CCL made their own offer. Nothing devious about that.  Happens all of the time when a company makes an unsolicited offer for another company, basically putting that company in play. Actually CCL made 3 offers, the first two rejected.  The third was accepted.  The breakup fee paid by P&O was what was in the original deal with RCL and was not determined by CCL.

 

Nothing devious about it, just a better offer made.

 

Instead of being a merger the CCL deal was a complete buyout, which as the head of PO put it

 

P&O Princess's chief executive, Peter Ratcliffe, said Carnival had won because it offered a dual share listing, allowing British shareholders to choose between holding shares on the London or New York stock markets

 

"Shareholders will be able to retain shares in one of the premier cruise businesses in the world," said Mr Ratcliffe. "We believe the combination with Carnival is financially more attractive than the deal with Royal Caribbean."

 

 

 

 

[Guest ldtr]

Just to do some comparisons from the last 10Q filed by each company in millions

 

CCL

Revenue   4305

Operating Income  (279)

Occupancy   84%

 

Current Liabilities    12,954   of which 4470 are passenger deposits 

Long term debt   28,518

Total Current Assets   8432

 

RCL

Revenue   2184

Operating Income  (219)

Occupancy   82%

 

Current Liabilities   11,719

Long Term Debt  17,746

Total Current Assets  3,560

 

If you compare CCL to RCL's last 10Q filing RCL actually appears to be in worse shape

 

Current liabilities/current assets    CCL  1.53     RCL 3.28

Occupancy      CCL   84%    RCL  82%

Operating income/Quarterly Revenue    CCL  -.065     RCL   -.1

ratio long term debt/quarterly revenue   CCL 6.62    RCL 8.125

 

So when one looks at the relative sizes of the company by looking at revenue  RCL actually looks in worse shape than CCL.  Both have heavy debt loads compared to revenue, both are running in the low 80% range.

 

Now considering that most of cruise line expenses are the same if the ship is 80% filled as it is with 100% occupancy (an increase in food in beverage, which to a large degree would be a rounding error.  So if one looks at current revenue and one can estimate what the revenue numbers would look like if they were to reach 100% occupancy.  In that case

 

Estimated quarterly revenue 100% percent occupancy   CCL  5125   RCL  2663.  At which time one would expect both to be cash flow positive with operating income to be   CCL   540, and RCL 260.  

 

Long term debt/estimated operating income at 100% occupancy  CCL  52.8   RCL   68.25

 

 

So basically CCL is in better shape than RCL based upon their last filings, both really need to get to 100% occupancy.  However, as high as their debt load is there are paths forward as long as occupancy continues to grow.  Quite a ways from BK.  Even a restructuring one that would leave passengers intact.

Edited October 20, 2022 by ldtr

[Guest ldtr]

1 hour ago, mcrcruiser said:

So what happens to the  pax on board a cruise if a cruise  line files for BK i filed when a ship is on it's   itinerary cruising  ? 

Depends upon the type of BK, if restructuring most likely not impacted.  If a liquidation they might be dropped at the next port.

[Guest ldtr]

For anyone interested NCLH is also worse than CCL when normalized for company size/revenue.

 

Revenue   1,187

Operating income (396)

Total current Assets  3131

Total current liabilities   5033

Long term debt  12,239

Occupancy 65%

 

Current liabilities/current assets    CCL  1.53     NCLH  1.60

Occupancy      CCL   84%    NCLH 65%

Operating income/Quarterly Revenue    CCL  -.065     NCLH  -.33

ratio long term debt/quarterly revenue   CCL 6.62    NCLH   10.31

 

CCL is not the only one doing debt offerings recently RCL completed one on 10/6/2022.  We can expect more for all 3 of the major holding companies.

Edited October 20, 2022 by ldtr