American cruise giant Royal Caribbean is falling heavily on Wall Street after the company announced that it will be forced to raise $1 billion in a bid to shore up its cash reserves, which have been depleted by the coronavirus pandemic. The announcement is dragging down its peers in the sector on the stock market.

Royal Caribbean will raise $500 million in new shares and issue convertibles worth $500 million. Following the announcement, Royal Caribbean fell almost 12 percent on Wall Street at 6:20 p.m. Swedish time. The news has also dragged down sector peers Carnival and Norwegian Cruise Line, which fell 6.9 and 7.3 percent respectively.

During the corona pandemic, the American cruise giants have lost hundreds of millions of dollars in revenue. On the stock market, Royal Caribbean is still down 54 percent since the beginning of the year.

It is also still unclear when cruise operations in the US can resume. American authorities have decided that the ports will be closed until October 31, but in a recent statement, the health authority pointed out that new outbreaks on cruise ships abroad reinforce the image that ships can become major infection centers. This makes it likely that the ban will be extended even after October 31, writes Marketwatch.

Source: di.se