Coronavirus: Cruise line CMV races for funds to keep it afloat

June 17, 2020

A British-based cruise line that employs 4,000 people is racing to secure funding to keep itself afloat after its operations were halted by the coronavirus pandemic.

Sky News has learnt that Cruise & Maritime Voyages (CMV) is in emergency talks with lenders and potential investors following the eleventh-hour collapse of a potential rescue deal.

Sources said on Wednesday that CMV, which is based in Essex and counts the Columbus and Marco Polo among its fleet, was attempting to finalise new financing before the end of the week.

They added that Novalpina Capital, a private equity firm, had been trying to structure a deal for several weeks with CMV's existing creditors.

The talks are said to have been abandoned this week when Barclays decided not to offer a £25m state-backed loan under the Coronavirus Large Business Interruption Loan Scheme.

Cruise lines have seen their business decimated by the pandemic, with uncertain prospects for a recovery because of the barrage of negative publicity that hit the industry when the initial outbreak spread earlier this year.

Carnival Corporation, which is one of the industry's largest players, has raised billions of dollars of additional liquidity to help it survive COVID-19.

In February, Carnival's Diamond Princess ship became the epicentre of fears about the cruise industry's ability to safely navigate the crisis, with 13 of its passengers dying after contracting COVID-19.

Cunard, which is owned by Carnival, said recently that it was cancelling all cruises due to embark before November 1.

Carnival is among CMV's creditors, according to insiders.

Virgin Voyages, which is backed by Sir Richard Branson, has also been forced to delay the launch of its services.

CMV, which has hundreds of head office and sales staff and thousands of crew on its ships, borrowed about €60m from Macquarie, the Australian bank, as recently as February.

People close to Macquarie said it had provided further support to the company by waiving interest payments and advancing additional funds to support salary payments to crew and repatriation efforts.

An undisclosed number of CMV crew members are still on board its ships and need to be repatriated, according to one source.

It was unclear on Wednesday which other parties remained in discussions with the company, which was established just over a decade ago.

A CMV spokeswoman said: "As the majority of other cruise lines have already done or are presently doing, CMV is also looking for additional financing to improve its liquidity position until sailing will resume again.

"As such CMV is presently in discussions and negotiations with a number of financial institutions and banks and is confident to finalise these discussions very shortly and so is unable to comment on or disclose details of these discussions with individual parties until they are finalised."

AlixPartners and Duff & Phelps, the professional services firms, have both been advising various stakeholders on CMV's financial position in recent months.

It is unclear what contingency planning has taken place in the event that the cruise line cannot secure the funding it requires.

A source close to Barclays said it had tried to put a CLBILS loan in place but that it had ultimately concluded that one was not workable.

Macquarie, Novalpina and Barclays either declined to comment or did not respond to a request for comment.

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