Cruise News: CDC Extends "No Sail," Lawsuit Against CCL Tossed, NCLH Selling Stock

Norwegian Epic
Norwegian Epic is shown above. Photo by Norwegian Cruise Line.

A flurry of cruise news this week included a decision by the U.S. Centers for Disease Control (CDC) to extend its "No Sail Order;" dismissal of a federal lawsuit against Carnival Corporation by two Grand Princess passengers; and Norwegian Cruise Line Holdings' decision to sell more share of common stock as well as senior notes.

Here's what you need to know...  

CDC Extends "No Sail Order"

On Thursday, the CDC said it would extend its "No Sail Order" order for cruise ships through September 30, 2020. That order suspends passenger operations on ships that carry at least 250 passengers in waters subject to U.S. jurisdiction. 

So, it does not apply to small ship lines transporting fewer guests (such as most vessels sailing American rivers) nor to any cruise lines sailing in international waters. 

The CDC press statement said the agency supports the June 19 decision by the Cruise Lines International Association (CLIA) to voluntarily extend suspension of operations for passenger cruise ship travel until September 15, and thus, in line with that, it was extending the no sail order through the end of September.

The CDC data—gathered from March 1 through July 10, 2020—shows 2,973 COVID-19 or COVID-like illness cases on cruise ships. In addition, 34 people have died.

Those cases were part of 99 outbreaks on 123 different cruise ships. During this time frame, 80 percent of ships were affected by COVID-19, the CDC said. As of July 3, nine of the 49 ships under the "No Sail Order" have ongoing or resolving outbreaks. According to U.S. Coast Guard data, as of July 10, 2020, there are 67 ships with 14,702 crew onboard.

This Order will remain in effect until either the secretary of Health and Human Services’ declares that COVID-19 no longer constitutes a public health emergency, or the CDC director rescinds or modifies the order based on specific public health or other considerations. 

The CDC also said on cruise ships, passengers and crew share spaces that are more crowded than most urban settings and even when only essential crew are onboard, the ongoing spread of COVID-19 still occurs. If unrestricted cruise ship passenger operations were permitted to resume, the CDC believes passengers and crew onboard would be at increased risk of COVID-19 infection. 

In addition, the CDC said that those who work or travel on cruise ships would place substantial unnecessary risk on healthcare workers, port personnel and federal partners (Customs and Border Protection and the U.S. Coast Guard), and the communities they serve.

For more CDC information about COVID-19 and cruise ships, visit www.cdc.gov/coronavirus. To view the No Sail Order, visit www.cdc.gov/quarantine/cruise.

Lawsuit by Princess Guests Dismissed

In Los Angeles this week, U.S. Federal Judge Gary Klausner dismissed a lawsuit against Carnival Corporation by a couple who sailed in March on Princess Cruises’ Grand Princess.

Ronald and Eva Weissberger of Florida had sued Princess’ parent company, claiming “emotional distress” caused by fear of COVID-19 exposure, as they said guests on the previous cruise disembarked with COVID-19 symptoms.

The Weissbergers were seeking more than $1 million from Carnival Corp. for emotional trauma and putting their health at risk. However, Judge Klausner said in his ruling that if their lawsuit was allowed to proceed, it would “lead to a flood of trivial pursuits.”

Grand Princess

Grand Princess // Photo by Princess Cruises

The judge said that allowing passengers to collect damages based on “potential” COVID-19 exposure without them suffering any symptoms opened the door to unlimited liability for bars, restaurants and other gathering places.

A lawyer for the couple told multiple media outlets, including Reuters that the couple were disappointed and were considering an appeal. The Weissbergers’ lawsuit was one of the first filed against the cruise company for the Grand Princess situation earlier this year.

NCLH Will Sell More Shares

Norwegian Cruise Line Holdings Ltd. (NCLH), is taking new measures to improve liquidity and repay a revolving credit facility.

Over the past two days, NCLH has filed several documents with the SEC (U.S. Securities and Exchange Commission), noting that it plans a public offering to sell an additional 16.6 million ordinary shares of its common stock. According to a NCLH document filed Thursday, the stock will be priced at $15 per share. The net proceeds are expected to generate $241 million or $277 million if the underwriters exercise their option to acquire additional shares in full. The net proceeds will be used for general corporate purposes. 

In addition, NCLH's subsidiary, NCL Corporation Ltd., plans to raise more funds via sales of two separate kind of "notes"—secured notes and exchangeable notes. One of these note offerings will be secured by one of the company's ships. 

Net proceeds from those notes will be used to repay NCLH’s $675 million senior secured revolving credit facility and to pay any related transaction fees and expenses. Any remaining proceeds will be used for general corporate purposes.

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