Norwegian Cruise Line targets a $515 million worth reduction
Norwegian Cruise Line Holdings had to launch a significant cost-cutting campaign in order to remain afloat.
The cruise line group said in its latest market update that it was striving for a $515 million cut in capital spending.
A large portion of that amount was applied to non-newbuild capital expenditures for 2020, namely $345 million. A total of $170 million is allocated through March 31, 2021 to reduced and deferred Capex for newbuild-related payments.
Specifically, Euler Hermes Aktiengesellschaft (Hermes) has already received a deferral of approximately $385 million in assured funding payments until April 2021 by export credit agencies (ECA) and NCL. The cruise ship owner is in the process of finalizing the deferral with their other ECA lenders of the remaining approximately $155 million in payments.
NCL's next newbuild-related payments will not be until April 2021 when they are done. The cruise liner company plans to add a further 10 ships by 2027.
Many debt and refinancing deferment options are also being reviewed.
The projected continuing ship operational and administrative operating costs of NCL are expected to range from $70 million to $110 million per month during the suspension of operations.
If the temporary suspension of sailing is extended further, the liquidity and financial status of the Norwegian will possibly continue to be significantly impacted.
Maritime Business World