Royal Caribbean Group Takes Steps to Raise $1-Plus Billion

In a move to bring in more cash for general corporate purposes and to pay down debt, Royal Caribbean Group took two financial steps today. 

First, the company announced it had begun a registered public offering of $500 million of shares of its common stock; however, if the financial underwriters exercise their full rights to purchase stock, the company could receive up to $575 million.

In addition, Royal Caribbean Group began a private offering of senior convertible notes to be issued by the company and due in 2023. That would raise another $500 million or up to $575 million if underwriters exercise their full options. 

Corporate Purchases and Note Repayments

Royal Caribbean Group said it expects to use a portion of the net proceeds to repay some senior notes due this year. The remainder of the sale proceeds will bring in cash to be used for general corporate purchases.

The company's ships sailing from U.S. ports and most other ports globally have been idled since spring. The exceptions? Royal Caribbean Group owns 50 percent of a venture that owns TUI Cruises and Hapag-Lloyd Cruises, both now operating some cruises for European guests.

Quantum of the Seas in Singapore Editorial

Quantum of the Seas docked in Singapore. // photo by Royal Caribbean

In Asia, the government of Singapore last week approved the group's roundtrip sailings from that nation on three-night "cruises to nowhere." Those will be operated by Royal Caribbean International's Quantum of the Seas. The Singaporean government also approved similar sailings by Genting's Dream Cruises

In the U.S., a "No Sail Order" from the U.S. Centers for Disease Control and Prevention, extends through October 31, 2020. It prevents cruise lines with ships of more than 250 passengers from offering any cruises from U.S. ports. 

Cruise line officials including Royal Caribbean Group's Richard Fain, chairman and CEO, talked with Vice President Mike Pence and the White House's Coronavirus Task Force in a conference call Friday, but it's not known whether the No Sail Order will be lifted or extended again. 

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