Invested across Southeast Alaska, Norwegian Cruise Line seeks to raise $2B to stay afloat

The Norwegian Pearl tied up at Skagway’s Broadway dock in July 2017. Two more cruise ships are moored at the railroad dock in the background. (Photo by Emily Files/KHNS)
The Norwegian Pearl tied up at Skagway’s Broadway Dock in July 2017. Two more cruise ships are moored at the railroad dock in the background. (Photo by Emily Files/KHNS)

Update (May 6, 11:54 a.m.) — Jacob Resneck, CoastAlaska

Norwegian Cruise Line Holdings Ltd. now says it’s successfully raised $2.225 billion.

“Contingent on completion of the transactions, the company expects to have approximately $3.5 billion of liquidity,” the company said in a statement released on Wednesday. “This significantly strengthens the company’s financial position and liquidity runway and it now expects to be positioned to withstand well over 12 months of voyage suspensions in a potential downside scenario.”

Norwegian Cruise Line Executive Vice President Howard Sherman told CoastAlaska in an email early Wednesday that the cruise line’s “commitment to Alaska is stronger than ever.”

“I can confirm for you that all of our investments in Alaska have been proceeding on schedule,” Sherman wrote. “The payments for the Juneau property have been made, and will continue to be made, on schedule. And both funding, and construction, of the projects at Ward Cove and Icy Strait Point have proceeded on schedule.”

Original story

Stock in Norwegian Cruise Line’s parent company took a dive on Tuesday, erasing more than 22% of its worth.

That’s following news that the cruise line is seeking to raise $2 billion in capital to stay afloat.

Norwegian is the smallest of the world’s big three cruise lines. But it’s heavily invested in Southeast Alaska. It deployed two megaships last year — the Norwegian Bliss and Norwegian Joy — and had planned their return this year until the COVID-19 pandemic.

The company had also been investing on dry land. It’s a partner with Hoonah’s Icy Strait Point which is expanding to add a second dock for megaships. The company is also involved in Ketchikan’s private megadock project under construction in Ward Cove.

Last year, Norwegian agreed to pay $20 million in a land auction for a 3-acre parcel on Juneau’s downtown waterfront owned by the Alaska Mental Health Trust.

“To date, Norwegian Cruise Lines has paid $15 million on schedule,” Alaska Mental Health Trust Authority spokesperson Allison Biastock wrote Tuesday in a statement to CoastAlaska. “NCL has been communicating that they expect to close the deal with complete payment later this calendar year.”

The Miami-based company told investors Tuesday it’s raising $2 billion through a combination of stock offerings and private bonds that would be paid back first in the event of the cruise giant going belly up. The cash infusion includes $400 million from L Catterton, a private equity group that gets a seat on Norwegian’s board of directors.

The company’s stock sale announcement included a cautionary note cataloging a laundry list of risks facing the cruise industry.

The risks and uncertainties facing Norwegian Cruise Line, the statement said, “are amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 outbreak.”

The company is putting up — among other things — two cruise ships and two islands it owns as collateral.