Carnival seeks US$6bn funding to mitigate ‘long-term impact’ of coronavirus on the cruise brand

The world’s largest cruise operator is looking to raise US$6 billion in new funding amid coronavirus fallout that has seen the global cruise industry particularly hard hit.

Carnival, whose lines include the UK’s P&O Cruises, Cunard, and the Princess brand, will raise US$3 billion in bonds secured on its ships, a further US$1.75 billion in convertible bonds and US$1.25 billion through issuing new shares.

The cruise line has conceded that demand may never recover after the coronavirus pandemic, with a consumer demographic tilted heavily towards people over 70 who are also those most vulnerable to coronavirus health issues.

Last year, Carnival has recorded around US$3 billion in annual profits from just under US$20 billion in revenues last year. But the Covid-19 pandemic has severely impacted their books, with the cruise company anticipating losses this year.

“[The] resulting illness and loss of life… could have a long-term impact on the appeal of our brands, which would diminish demand for vacations on our vessels,” Carnival said in a statement to the stock market announcing its refinancing plans.