Carnival looking for shipyard to finish Radiance conversion

[jimbo5544]

Interesting.

 

https://www.cruiseindustrynews.com/cruise-news/23195-carnival-looking-for-shipyard-to-finish-radiance-conversion.html

 

[chocolate melting cake]

Jimbo, we've been following this since this morning. If my thinking is correct, the Breeze is covering through May 24--IF the Radiance is complete at that time, then she would sail into Port Canaveral on May 2. I mention this since we are booked on the Radiance May 2-14 when she makes her cruise to Galveston---her "new" port. The way I figure, we would be (quite by accident)  on her "inaugural cruise".

[jimbo5544]

16 hours ago, chocolate melting cake said:

Jimbo, we've been following this since this morning. If my thinking is correct, the Breeze is covering through May 24--IF the Radiance is complete at that time, then she would sail into Port Canaveral on May 2. I mention this since we are booked on the Radiance May 2-14 when she makes her cruise to Galveston---her "new" port. The way I figure, we would be (quite by accident)  on her "inaugural cruise".

You very well may be.

[UrbishN]

On 7/7/2020 at 2:25 PM, chocolate melting cake said:

Jimbo, we've been following this since this morning. If my thinking is correct, the Breeze is covering through May 24--IF the Radiance is complete at that time, then she would sail into Port Canaveral on May 2. I mention this since we are booked on the Radiance May 2-14 when she makes her cruise to Galveston---her "new" port. The way I figure, we would be (quite by accident)  on her "inaugural cruise".

I sail her May 28. Cutting it awful close for us . I read the article about looking for a shipyard and asked John Heald , he said the work will remain in Spain . Then I saw an article from Spain that the union wanted Carnival to remove the Victory from the dock as they are concerned about carnival filing bankruptcy and the ship not being able to move and deterring other contracts for the shipyard . So maybe they will move her to another dock in Spain or a new shipyard all together???

[jimbo5544]

1 hour ago, UrbishN said:

I sail her May 28. Cutting it awful close for us . I read the article about looking for a shipyard and asked John Heald , he said the work will remain in Spain . Then I saw an article from Spain that the union wanted Carnival to remove the Victory from the dock as they are concerned about carnival filing bankruptcy and the ship not being able to move and deterring other contracts for the shipyard . So maybe they will move her to another dock in Spain or a new shipyard all together???

I have no idea why the look for the new ship yard to complete the transformation, but Carnival is def not declaring bankruptcy in the next year.  Take that to the bank

 

[THIS IS US!]

Any update on the dry dock progress for the radiance?

[chengkp75]

On 7/11/2020 at 10:08 AM, UrbishN said:

I sail her May 28. Cutting it awful close for us . I read the article about looking for a shipyard and asked John Heald , he said the work will remain in Spain . Then I saw an article from Spain that the union wanted Carnival to remove the Victory from the dock as they are concerned about carnival filing bankruptcy and the ship not being able to move and deterring other contracts for the shipyard . So maybe they will move her to another dock in Spain or a new shipyard all together???

Would love to see this article, since the premise is complete rubbish.  First off, the vast majority of the "upgrade" is not underwater, so does not require a drydock.  Then, even if she were in drydock, and Carnival filed for bankruptcy, unless there are gaping holes in the hull, the ship can be readied to float out in a day's time, at minimal expense to the yard, (and even if there were holes, there are ways around that), so the drydock would not be impacted.  Plus, the shipyard then has a "mechanics lien" on the ship, so whoever takes over from Carnival, or after their reorganization, that lien would be paid before the ship was returned to the owner.  Dockworkers would know all of this.

[Stick93]

Bottom line - nobody knows if this ship will be ready and who is doing the work. In these unsure times that’s about where we stand on everything so there is no reason to be more or less worried about this. 

[skridge]

If I were a shipyard I wouldn't be doing anything on credit with a company that is in such a weak financial position with no end in sight.

[Stick93]

If the shipyards turn away Carnival which is the largest company - who will they do business with?  They need work to stay open themselves I would have to think. Are there any companies in better shape with more ships that need servicing that these shipyards are begging to bring in business. 
 

I think the real issue will be new builds that have not started yet. That’s where I think the line gets a bit blurry. The longer they cannot fill ships up the more these new ships may not be needed. 
 

[skridge]

25 minutes ago, Stick93 said:

If the shipyards turn away Carnival which is the largest company - who will they do business with?  They need work to stay open themselves I would have to think. Are there any companies in better shape with more ships that need servicing that these shipyards are begging to bring in business. 
 

I think the real issue will be new builds that have not started yet. That’s where I think the line gets a bit blurry. The longer they cannot fill ships up the more these new ships may not be needed. 
 

You make a good point.  The problem I see is if you make a deal on a $200 million dollar refurb with a company that is in a business that is unable to do business right now, I think I would ask for my $200 million out of that cash on hand.  I don't think Micky is going to give up 1/3 a months of cash burn to refurbish a ship in the middle of a pandemic.  What do I know I am just a small business owner, but I did stay at a Holiday Inn Express last night.😂

[Stick93]

3 minutes ago, skridge said:

You make a good point.  The problem I see is if you make a deal on a $200 million dollar refurb with a company that is in a business that is unable to do business right now, I think I would ask for my $200 million out of that cash on hand.  I don't think Micky is going to give up 1/3 a months of cash burn to refurbish a ship in the middle of a pandemic.  What do I know I am just a small business owner, but I did stay at a Holiday Inn Express last night.😂

I understand your point. Logic dictates one thing and needs dictate reality.  I am not so sure this ship is getting done so quickly as capital investment right now when you have nothing coming in may not be a smart idea. But the shipyards need work and may be willing to give a bit to get a bit with an IOU and interest. Will be interesting to see how it plays out as no one really knows what the big brains are thinking - holiday inn express and all!! 
 

[tidecat]

With Radiance not set to return to service to April, there is still some time, although the ship will need a few weeks to to cross the Atlantic and then over to the West Coast. As long as work starts by mid-January it shouldn't be an issue.

[chengkp75]

2 hours ago, Stick93 said:

If the shipyards turn away Carnival which is the largest company - who will they do business with?  They need work to stay open themselves I would have to think. Are there any companies in better shape with more ships that need servicing that these shipyards are begging to bring in business. 
 

I think the real issue will be new builds that have not started yet. That’s where I think the line gets a bit blurry. The longer they cannot fill ships up the more these new ships may not be needed. 
 

The shipyards do business with far more than Carnival.  Cruise ships represent about 5% of the world's shipping, and every one of those ships needs periodic shipyard work, just like the cruise ships do.  The vast majority of work done in a "revitalization" of a cruise ship like this is done by sub-contractors hired directly by the cruise line, and not the shipyard, so the yard only sees a portion of the millions spent on the ship.

[Stick93]

Just now, chengkp75 said:

The shipyards do business with far more than Carnival.  Cruise ships represent about 5% of the world's shipping, and every one of those ships needs periodic shipyard work, just like the cruise ships do.  The vast majority of work done in a "revitalization" of a cruise ship like this is done by sub-contractors hired directly by the cruise line, and not the shipyard, so the yard only sees a portion of the millions spent on the ship.

Okay - sounds like carnival might have no funnel to stand on then!

[chengkp75]

2 hours ago, skridge said:

I still wouldn't do work on a cruise ship on credit right now.  I don't care how much cash the company has on hand.  I am sorry my realistic way of thinking bothers you so much.  https://www.foxbusiness.com/markets/carnival-cash-burn-coronavirus-second-quarter-earnings

And, yet, the shipyard will "own" an asset that will get them at least $7-10 million just in scrap value.  Very easy for the yard to place a lien and seize the ship for non-payment.  Happens all the time, and then suddenly "the money becomes available".

[skridge]

36 minutes ago, chengkp75 said:

And, yet, the shipyard will "own" an asset that will get them at least $7-10 million just in scrap value.  Very easy for the yard to place a lien and seize the ship for non-payment.  Happens all the time, and then suddenly "the money becomes available".

I would agree with you if they are in the first lien holder position.  I am guessing there is a bank in that position.  Either way my personal opinion is I would rather as a shipyard build and fix cargo ships for the time being until cruise lines start bringing in revenue.  I am a small business owner that runs his business very conservatively.  That is the mindset that I am coming from.  I respect your opinion as someone in the industry, I just have a different opinion. 

[chengkp75]

1 hour ago, skridge said:

I would agree with you if they are in the first lien holder position.  I am guessing there is a bank in that position.  Either way my personal opinion is I would rather as a shipyard build and fix cargo ships for the time being until cruise lines start bringing in revenue.  I am a small business owner that runs his business very conservatively.  That is the mindset that I am coming from.  I respect your opinion as someone in the industry, I just have a different opinion. 

A maritime lien is a "privileged claim", meaning it moves to top priority, and the lien holder has the right to hold the ship until the lien is paid.  Any Admiralty court in any country will assign one of these liens.

[skridge]

15 minutes ago, chengkp75 said:

A maritime lien is a "privileged claim", meaning it moves to top priority, and the lien holder has the right to hold the ship until the lien is paid.  Any Admiralty court in any country will assign one of these liens.

Hypothetically, if Carnival was to go bankrupt wouldn't they go to a bankruptcy court and not an Admirality court, which I frankly didn't know was a thing until 5 minutes ago?

[chengkp75]

49 minutes ago, skridge said:

Hypothetically, if Carnival was to go bankrupt wouldn't they go to a bankruptcy court and not an Admirality court, which I frankly didn't know was a thing until 5 minutes ago?

Yes, their bankruptcy would be handled in a bankruptcy court, but the seizure of a ship falls under Admiralty law.  I've been on ships where the US Marshals came down to impound the ship because the shipyard had not paid their subcontractor.  All US federal courts, and some state courts are also Admiralty courts, in that they can apply international Admiralty law to a case.

[Moviela]

Carnival has said Radiance will be taking passengers in late April 2021. They are selling tickets. They have booked provisions and ports. I have no doubt the ship will be tied up in Long Beach for its first scheduled cruise. The shipyard and subs will have been paid. 

 

Talk of Carnival LLC & PLC bankruptcy is a nonstarter. They have plenty of assets and access to funding. If the market thought there was any chance of it not being a viable company, the stock would drop below one dollar. 

 

 

[BlerkOne]

3 hours ago, chengkp75 said:

And, yet, the shipyard will "own" an asset that will get them at least $7-10 million just in scrap value.  Very easy for the yard to place a lien and seize the ship for non-payment.  Happens all the time, and then suddenly "the money becomes available".

 

As most of the ships are pledged as collateral, I don't know that it is that simple. However Carnival has loan guarantees for ship construction and such.

[chengkp75]

10 minutes ago, BlerkOne said:

 

As most of the ships are pledged as collateral, I don't know that it is that simple. However Carnival has loan guarantees for ship construction and such.

As much as I hate to quote Wiki, here are some terms of a maritime lien:

 

Two significant differences between maritime liens, which only exist in admiralty law, and the right to keep that exist in general civil law are (1) that in general civil law, "Prior in time is prior in right", i.e., the rights of the lienholder with the earliest lien are superior to those of later lienholders, whereas in maritime law the rights of the most recent lienholder are superior, and (2) all maritime liens are superior to all non-maritime liens. For instance, in the United States, a federal tax lien, which is a non-maritime lien, is subordinate to every lien for supplies, fuel, repairs, etc., which are all maritime liens.

 

So, while both the mortgage on the ship, and the shipyard's bill are both maritime liens, the shipyard's lien is the most recent, and therefore the superior lien.  It's actually a good article about maritime liens and how they are against the ship itself, and not the owner.

[BlerkOne]

3 minutes ago, chengkp75 said:

So, while both the mortgage on the ship, and the shipyard's bill are both maritime liens, the shipyard's lien is the most recent, and therefore the superior lien.  It's actually a good article about maritime liens and how they are against the ship itself, and not the owner.

 

I think Carnival has pledged the same collateral multiple times and all they would have to do is pledge it again after the shipyard bill. But again, I think it is moot.

[skridge]

1 hour ago, chengkp75 said:

Yes, their bankruptcy would be handled in a bankruptcy court, but the seizure of a ship falls under Admiralty law.  I've been on ships where the US Marshals came down to impound the ship because the shipyard had not paid their subcontractor.  All US federal courts, and some state courts are also Admiralty courts, in that they can apply international Admiralty law to a case.

Thanks.  You learn something new every day.  I can't imagine a bank ever loaning money to a cruise company knowing that there collateral that is worth in some cases a Billion dollars can be taken and sold for scrap because some ship yard is owed money.