In its latest effort at CDC guideline compliance, Carnival (CCL 5.52%) (CUK 5.32%) announced Wednesday it is canceling all U.S.-based cruises between Jan. 1 and Jan. 31, 2021. During this time, no cruises will leave the company's American "homeports." Its Australia cruises remain paused until March 2 at the earliest.
Carnival says that once it does resume American cruises after Jan. 31 with some of its current home waters fleet of 16 vessels, it will do so gradually, from just three of its homeports: Port Canaveral and Miami in Florida, and Galveston in Texas. Seven other homeports, including Baltimore, Charleston, Jacksonville, Long Beach, Mobile, New Orleans, and San Diego, will remain closed for cruise launches through Feb. 28.
One cruise, the Tampa-based Carnival Legend, will remain out of operation until March 27 under current plans.
While this sailing pause extension further delays the return of critically needed revenue streams to reverse its current massive monthly cash burn, Carnival is selling another 57.4 million shares of common stock to raise money. The move comes only eight days after the cruise line sold shares worth $1.5 billion, following yet another sale of $1 billion worth of shares.
Today's equity offering, sold at $18.05 per share, won't boost the company's liquidity. Instead, all proceeds realized will immediately be used to redeem bonds, buying back approximately $499.4 million worth of 5.75% senior notes due in 2023. This will leave $627.5 million in notes outstanding.
Though the move reduces Carnival's indebtedness, The Street reports some analysts believe Carnival's repeated dilution of its stock could prevent it from rebounding above the mid-$40 range even once cruising resumes full blast.