Royal Caribbean (RCL 0.57%) continues to be storm-tossed by the coronavirus pandemic. Although its 2021 bookings continue to improve, the cruise ship operator is still burning through cash at a rate of $250 million to $290 million per month so it wants to raise $1 billion by issuing new stock and selling more debt.
In a new SEC filing Tuesday, Royal Caribbean says COVID-19 continues to have "a material negative impact on our financial condition and results of operations."
Still in rough waters
Royal Caribbean has no cruises planned until at least Dec. 1 at the earliest as it awaits approval from the U.S. Centers for Disease Control.
It says bookings for next year have improved over the last two months, though pricing is flat year over year when the impact of credits given for canceled cruises is factored in. While it has offered customers the option of receiving cash refunds or changing their reservations until next year through its "lift and shift" program, it notes about half of its customers have chosen to receive refunds. As of June 30, it has about $1.8 billion in customer deposits, about the same as it did at the end of March.
Despite burning through a lot of money, Royal Caribbean says it still has plenty of liquidity available, including $3 billion in cash and equivalents and $700 million in short-term loan commitments.
Even so, it plans to issue $500 million in new stock with an option for underwriters to purchase an additional $75 million. It also plans to issue $500 million in senior convertible notes due in 2023, also with an option for underwriters to purchase $75 million more. All of the money will be used for general corporate purposes.