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NCL Needs Creative Innovation - Fast - Or Else


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4 hours ago, Formula280SS said:

 

Not trashing others opinions, just taking the words out of my mouth that they put in and then subjected to judgment.

 

BTW, any thoughts on NCL taking creative, innovative action fast?  Nope.  I didn't think so.  Thought police; another volunteer.

 I thought that sometime last year they procured financing to stay solvent for two years?? At the time, I thought that was excessive, but now it may be just right. I realizing there is a lot of added expense for them now with all the health protocols, but I also think that the shut down will not be for two entire years. Hopefully, with the financing they already have, they will not need to get more creative.

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Personally, as soon as our first cruise in March 2020 was cancelled, I wrote off the money that was transferred into FCC. But as long as the company exists I have hope I'll be able to transfer that money to a new cruise. (Right now, we're looking at our 3rd cruise being cancelled due to COVID.)

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On 2/6/2021 at 5:55 PM, Formula280SS said:

As I've opined in threads, NCL is on the weakest foundation financially and market demographically, of the big three.  It simply cannot go through June 30, 2021 without qualifications of its "going concern" capabilities (to meet obligations 1 year out from issuance of financial reports), failures to meet its debt covenants and certainly its cash reserves. 

 

I really like NCL as a cruiser (also MSC, RCCL).  I just can't see them financially making it (the number of months it appears that cruising is OUT for normalcy is now well in to next year), or more equity offerings or debt offerings that make sense.

 

So, why not 'take the fight on and get creative.  They have nothing to lose possibly.

 

1.  Plan, on their knees working with the CDC, to start cruises with a modification of MSC's protocols on Grandiosa in Italy (testing, masks, controlled excursions, etc.) and add vaccinated status passenger (and entire crew) cruises to start only.  Many of the cruise line demographics are age-tiered and that is the prioritization of the vaccines in most jurisdictions.

 

2.  Even if no ports of call, or the CDC, will not relent if the itineraries are deemed a risk at the time, start cruises to nowhere, with increased use of their private islands.

 

There has to be a "breaking of the ice."  They have to "start something." 

 

They have nothing to lose by trying, and if they don't try FAST, IMO they are done (as in ownership structure as we know it today).

 

Personally, I don't believe the NCL leadership "has what it takes."  I hope I'm wrong.

 

IMO.

it's sad  but I agree with you.... its needs to start soon or there will be loads of cruise lines out of business. I actually  don't know why it has not happened yet as cruise lines can't go on any more without business until they go bankrupt. 

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On 2/6/2021 at 12:55 PM, Formula280SS said:

As I've opined in threads, NCL is on the weakest foundation financially and market demographically, of the big three.  It simply cannot go through June 30, 2021 without qualifications of its "going concern" capabilities (to meet obligations 1 year out from issuance of financial reports), failures to meet its debt covenants and certainly its cash reserves. 

 

I really like NCL as a cruiser (also MSC, RCCL).  I just can't see them financially making it (the number of months it appears that cruising is OUT for normalcy is now well in to next year), or more equity offerings or debt offerings that make sense.

 

So, why not 'take the fight on and get creative.  They have nothing to lose possibly.

 

1.  Plan, on their knees working with the CDC, to start cruises with a modification of MSC's protocols on Grandiosa in Italy (testing, masks, controlled excursions, etc.) and add vaccinated status passenger (and entire crew) cruises to start only.  Many of the cruise line demographics are age-tiered and that is the prioritization of the vaccines in most jurisdictions.

 

2.  Even if no ports of call, or the CDC, will not relent if the itineraries are deemed a risk at the time, start cruises to nowhere, with increased use of their private islands.

 

There has to be a "breaking of the ice."  They have to "start something." 

 

They have nothing to lose by trying, and if they don't try FAST, IMO they are done (as in ownership structure as we know it today).

 

Personally, I don't believe the NCL leadership "has what it takes."  I hope I'm wrong.

 

IMO.

I am curious.  If NCL is in the weakest position of the 3 majors, why haven't they sold any ships and why do they continue to advertise?  RCL and CCL both have sold ships.  In fact, RCL sold an entire cruise line.  Also,  as far as bankruptcy, do you think they will go out all together or just restructure?  

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3 hours ago, Crazy planning mom said:

I am curious.  If NCL is in the weakest position of the 3 majors, why haven't they sold any ships and why do they continue to advertise?  RCL and CCL both have sold ships.  In fact, RCL sold an entire cruise line.  Also,  as far as bankruptcy, do you think they will go out all together or just restructure?  

 

Re: selling any ships, the ships are individually, or in groups, fully leveraged (with loans already), so they would essentially get nothing for selling a ship.  They don't have the size of CCL or RCL that also have a long list of old ships (primarily CCL, which has sold the most).

 

Re: bankruptcy, which likely will be a reorganization, is the primary method to wipe out equity (shareholders first), and then creditors on the lower end of the scale (elimination or concessions).  IMO, something called NCL will continue, just with a different ownership structure controlled by the most senior of the bondholders.

 

Re: continuing to advertise, they need to keep getting customer deposits, which are interest free, uncollaterized loans at this point.

 

IMO, NCL (or any of the other cruise lines or other industries) didn't do anything from a company or management position that caused this; it's 100% the pandemic.  The same 15 days a year ago to "bend the curve" looks like it might turn into almost a 2-year revenue free, then revenue diminished time period.  They've done almost everything financially that they could, for example the $850M the borrowed in December, which will be needed if they can't refinance the $700M debt due late this fall.

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4 hours ago, Formula280SS said:

 

Re: selling any ships, the ships are individually, or in groups, fully leveraged (with loans already), so they would essentially get nothing for selling a ship.  They don't have the size of CCL or RCL that also have a long list of old ships (primarily CCL, which has sold the most).

 

Re: bankruptcy, which likely will be a reorganization, is the primary method to wipe out equity (shareholders first), and then creditors on the lower end of the scale (elimination or concessions).  IMO, something called NCL will continue, just with a different ownership structure controlled by the most senior of the bondholders.

 

Re: continuing to advertise, they need to keep getting customer deposits, which are interest free, uncollaterized loans at this point.

 

IMO, NCL (or any of the other cruise lines or other industries) didn't do anything from a company or management position that caused this; it's 100% the pandemic.  The same 15 days a year ago to "bend the curve" looks like it might turn into almost a 2-year revenue free, then revenue diminished time period.  They've done almost everything financially that they could, for example the $850M the borrowed in December, which will be needed if they can't refinance the $700M debt due late this fall.

Thank you for your informed opinion.  I do not have any fcc with NCL but I do have an October 2022 cruise scheduled. Would bankruptcy restructuring affect my cruise?

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I'm not sure any degree of creativity and innovation can help at this point. NCL financials are bleak at best. IMO; the problem with the CDC Conditions to sail order is the requirements for what cruise lines must do in preparation for a positive case. I don't believe MSC has any of those restrictions. That leaves sailing places that "work around" the CDC order. I just don't see the market for such cruises being strong enough to offer even a temporary band-aid. My speculation (and it's just that) is that restructuring deals are already in the works. Buckle up.

 

Of course, I could be wrong 🙂

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19 minutes ago, BermudaBound2014 said:

I'm not sure any degree of creativity and innovation can help at this point. NCL financials are bleak at best. IMO; the problem with the CDC Conditions to sail order is the requirements for what cruise lines must do in preparation for a positive case. I don't believe MSC has any of those restrictions. That leaves sailing places that "work around" the CDC order. I just don't see the market for such cruises being strong enough to offer even a temporary band-aid. My speculation (and it's just that) is that restructuring deals are already in the works. Buckle up.

 

Of course, I could be wrong 🙂

I don’t think you are wrong...very sad but true 

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Someone in the industry mentioned that FDR would take on, Oceania Cruises, and Regent Seven Seas Cruises brands, if it restructured ? It was said he expressed some interest in them.

 

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1 hour ago, Crazy planning mom said:

Thank you for your informed opinion.  I do not have any fcc with NCL but I do have an October 2022 cruise scheduled. Would bankruptcy restructuring affect my cruise?

 

I've seen some posts re: customer deposits.  Some points noted were that customer deposits, in a U.S. bankruptcy court, are below secured creditors and administrative expenses (the bankruptcy restructuring proceeding; these are big dollars for legal, consulting, etc.) and that, under the best scenario, such are only allowed up to a maximum amount of $2,600 ahead of unsecured creditors.

 

Also, NCL is incorporated in Bermuda, so it would appear that jurisdiction has something different than the above.

 

Re: affect on cruise.  Generally, if the creditors (senior most are the ones in control of the creditors committee) agree, or if the court orders without their agreement, can let the entity continue to operate.  The entity generally would try to get DIP (debtor in possession) financing for such and such new lenders actually take priority position over pre-existing creditors (in the U.S.).  Typically, a large pre-existing creditor or group is a DIP lender.

 

Re: your deposit less formally, one would think that a subsequent, reorganized entity, usually the most senior of creditors, would want to make good on customer deposits and honor them in some way.

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47 minutes ago, BermudaBound2014 said:

I'm not sure any degree of creativity and innovation can help at this point. NCL financials are bleak at best. IMO; the problem with the CDC Conditions to sail order is the requirements for what cruise lines must do in preparation for a positive case. I don't believe MSC has any of those restrictions. That leaves sailing places that "work around" the CDC order. I just don't see the market for such cruises being strong enough to offer even a temporary band-aid. My speculation (and it's just that) is that restructuring deals are already in the works. Buckle up.

 

Of course, I could be wrong 🙂

 

You are likely right.

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22 minutes ago, Formula280SS said:

Also, NCL is incorporated in Bermuda, so it would appear that jurisdiction has something different than the above.

US law allows businesses that are incorporated overseas to utilize US bankruptcy laws, if they earn revenue in the US.  Most companies do this because the US laws are the most lenient.

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When I worked in insolvency 80% of the time the forward agreements and terms were already worked out, all they waited for was a big event to cover the news. Even after 10 years away, I would never trust a solicitor in my local area with any good forthcoming deal. It’s corrupt 

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