Royal Caribbean increases borrowing capacity by $550 million to stay afloat

article

NEW YORK - Royal Caribbean Cruises, which has seen its stock take a big drop in the wake of the coronavirus outbreak, says that is has increased its revolving credit capacity by $550 million to bolster its liquidity.

The company says it is also reducing capital expenditures, operating expenses and taking other actions in an effort to improve liquidity by at least another $1.7 billion in 2020.

The company is also planning reductions to the 2021 capital expenditures and operating expenses.

>Coronavirus concerns damaging travel industry

The entire industry has been under pressure due to high profile cases of coronavirus being connected to ships.  Royal Caribbean's stock has lost more than half of its value this year.

The industry was further damaged on Sunday when the State Department recommended that "U.S. citizens, particularly travelers with underlying health conditions, should not travel by cruise ship."

The company had previously said that its 2020 guidance did not include the impact of the COVID-19 coronavirus outbreak.

"These are extraordinary times and we are taking these steps to manage the company prudently and conservatively," said Richard D. Fain, chairman and CEO.

Royal Caribbean Cruises runs Royal Caribbean International, Celebrity Cruises, Azamara and Silversea Cruises and is also a 50% joint venture owner of the German brand TUI Cruises and a 49% shareholder in the Spanish brand Pullmantur Cruceros.

Together these brands operate a combined total of 61 ships with an additional 17 on order.