Carnival share price drops after $1bn share offering
Proceeds to be used ‘for general corporate purposes’
MikeTyes
The share price of Carnival Corporation & plc dropped by almost 12% on Thursday (July 22) after the cruise giant announced a $1 billion common stock offering.
The company said it expects to use the net proceeds from the offering for general corporate purposes, which could include addressing 2023 debt maturities.
Goldman Sachs will act as sole bookrunner and underwriter for the proposed public offering.
The cruise company intends to grant the underwriter a 30-day option to purchase up to $150 million of additional shares of common stock.
Forbes said news of the stock offering “spooked investors” and rivals Norwegian Cruise Line and Royal Caribbean Cruises also saw their share prices fall.
Its report said cruise lines are seeing a “slow return to full capacity” after the pandemic no-sail orders and highlighted current economic woes such as high inflation and rising oil prices which are affecting the industry.
Carnival’s portfolio features Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, P&O Cruises (Australia), Costa Cruises, Aida Cruises, P&O Cruises (UK) and Cunard.
