In a 59-page public filing, one sentence stood out to investors: Norwegian Cruise Line Holdings disclosed there is “substantial doubt” about its ability to continue “as a going concern” unless steps are taken to increase liquidity.

The May 5 filing came the same day NCLH received a vote of confidence from an affiliate of the private equity firm L Catterton in the form of an investment of $400 million in exchangeable senior notes due in 2026.

NCLH outlined a series of additional steps needed to maintain sufficient liquidity, so the company can meet its obligations over the next 12 months. These include selling $650 million in four-year senior notes in a private offering, raising $600 million by selling senior secured four-year notes and selling $350 million in stock in a secondary public offering.

Also in the regulatory disclosure, the company warned that should it be unable to fulfill its liquidity needs, “it may be necessary for us to reorganize our company in its entirety, including through bankruptcy proceedings.” 

NCLH’s stock price closed the day down more than 22%, to just over $11.

In announcing his firm’s investment, L Catterton CEO Scott Dahnke said, “The cruise industry has been very resilient over a long period of time, driven by strong secular tailwinds and a high level of guest satisfaction. People enjoy cruising, with many guests taking multiple voyages over time. The industry has overcome numerous challenges in the past, and we expect that the industry will rebound and prosper with even further enhancements to their already rigorous health and safety protocols in place in the future.”

Dahnke also said that Norwegian Cruise Line Holdings’ three brands (Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises) “have carved out distinctive leadership positions in their respective markets, guided capably by Frank Del Rio and his exceptional management team. We couldn’t be more excited to support the team at Norwegian as they work through this suspension of travel and begin to commence operations after their voluntary suspension of voyages.”

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