Coronavirus: Saga seeks debt holiday and warns cruises could be suspended for six months
Saga, the cruise operator and insurance provider for over-50’s, said this morning it plans to ask for a debt holiday as it warned that it could be forced to postpone holidays for up to six months.
Saga’s share price dropped more than five per cent after it said full year revenue could be down around 65 per cent for tour operations and cruises, if the cruise business was to be suspended for six months.
The revenue drop would result in a 15 per cent to 20 per cent fall in earnings for tour operations and a 55 per cent to 60 per cent cut in profit for its cruise business, the company said.
Saga, which has cancelled all of its cruises until at least May, scrapped its dividend after posting a 39 per cent fall in profit for the year to the end of January.
The company said it would seek to pause debt payments due to the financial impact of coronavirus.
Saga said: “The group will apply for a waiver of the covenants in the ship debt and is likely to apply for a debt holiday for the period to 31 March 2021 under a package of proposals that are being put together for the cruise industry.”
Chief executive Euan Sutherland said: “Saga Insurance remains largely unaffected by Covid-19, however along with all other travel businesses, our travel business has been significantly impacted.
“We have acted quickly to ensure the health and wellbeing of our customers and colleagues and, following the Government’s advice on cruise ship and air travel, we have suspended our cruise and tour operations.
“We have also worked with our banks to agree temporary amendments to our debt covenants. We have significant available liquidity and can consider a range of further mitigating actions across the group.”