Royal Caribbean directors step in to help with new bank loan

(Reuters) - Royal Caribbean Cruises Ltd RCL.N said on Monday two of its board members had each bought $100 million of a new $2.2 billion loan to the cruise operator, helping to backstop funding as it grapples with a suspension of voyages.

The purchases by Eyal Ofer and Arne Alexander Wilhelmsen came as a syndicate of banks comprising Morgan Stanley MS.N, JPMorgan Chase & Co JPM.N, Bank of America BAC.N, BNP Paribas SA BNPP.PA and Goldman Sachs GS.N agreed to arrange the new one-year loan.

Wilhelmsen is Royal Caribbean’s largest shareholder with an approximately 11% stake in the company.

U.S. companies have been rushing to borrow more money and boost their cash coffers, as economic fallout from the coronavirus pandemic hits their business and threatens a prolonged downturn.

The cruise industry has been among the worst affected sectors, as many operators halted operations due to travel restrictions imposed to curb the spread of the virus.

With the new secured term loan facility, Royal Caribbean said it had over $3.6 billion in liquidity, including cash deposits and its existing undrawn revolving credit facilities.

“This is a period of unprecedented disruption for the cruise industry. We continue to take decisive actions to protect the company’s financial and liquidity positions as they enable us to keep focused on our guests, our crew and our long-term plans,” Chief Financial Officer Jason Liberty said in a statement.

Earlier this month, the company raised its credit capacity by $550 million and said it would cut spending, operating expenses and take other actions to improve liquidity by at least another $1.7 billion in 2020.

Reporting by Aishwarya Venugopal in Bengaluru and Joshua Franklin in New York; Editing by Shinjini Ganguli and Tom Brown