8-KOther EventsExhibits & Filings

CARNIVAL CORP 8-K Report, Corporate Update (Jun 28, 2021)

Filed June 28, 2021For Securities:CCL

Summary

Carnival Corporation announced on June 28, 2021, that it has filed a prospectus supplement to offer and sell up to $500 million of its common stock through an "at-the-market" equity offering program. The primary intention behind this offering is to purchase ordinary shares of its subsidiary, Carnival plc, on at least an equivalent basis. This strategy aims to leverage potential price discrepancies between the two entities' shares, creating an economic benefit for the combined company. Net proceeds not used for purchasing Carnival plc shares will be allocated to general corporate purposes. The timing of any sales will be dependent on market conditions, specifically the trading price of Carnival plc's ordinary shares relative to Carnival Corporation's common stock. This filing also reiterates Carnival's ongoing cautionary note regarding numerous risks and uncertainties, including the significant impact of the COVID-19 pandemic on its operations, liquidity, and future outlook, as well as other industry-specific and global risks.

Key Highlights

  • 1Carnival Corporation is launching an "at-the-market" equity offering to raise up to $500 million.
  • 2Proceeds will primarily be used to buy back Carnival plc ordinary shares, aiming to exploit potential price differentials between the two stock classes.
  • 3Any remaining proceeds will be used for general corporate purposes.
  • 4The offering is structured to generate an economic benefit for the combined Carnival entity.
  • 5The company continues to emphasize significant risks related to the COVID-19 pandemic's impact on its business.
  • 6Various other risks including geopolitical events, regulatory changes, and operational challenges are highlighted.
  • 7A selling agreement has been entered into with BofA Securities, Inc. as the agent for the offering.

Frequently Asked Questions

Carnival Corporation plans to use the proceeds from this "at-the-market" equity offering primarily to purchase ordinary shares of Carnival plc. The goal is to buy back shares on at least an equivalent basis to the shares sold, potentially capturing an economic benefit if Carnival plc's shares trade at a discount to Carnival Corporation's shares.

This strategy is designed to capitalize on potential price discrepancies between Carnival Corporation's common stock and Carnival plc's ordinary shares. By selling its own stock and using the proceeds to buy its subsidiary's stock, the company aims to create value for shareholders by reducing the number of Carnival plc shares outstanding at a favorable exchange rate, thereby potentially enhancing earnings per share and overall financial efficiency.

The company reiterates its extensive cautionary note, with a significant emphasis on the ongoing and uncertain impact of the COVID-19 pandemic on its financial condition, operations, and ability to secure financing. Other risks include travel demand fluctuations due to world events, regulatory changes, data security breaches, operational challenges, fuel price increases, currency fluctuations, and industry competition.

The timing of any sales will depend on a variety of factors, including market conditions and specifically when the ordinary shares of Carnival plc are trading in the United Kingdom market at a discount to Carnival Corporation's common stock. The offering is conducted through an "at-the-market" program, meaning sales can occur over time.