Saudi takes part of Carnival

Saudi Arabia’s sovereign wealth fund has taken a bet on Carnival Corp with a 8.2% stake in the ailing cruise giant.

With stock value plummeting more than 80% since January, the Public Investment Fund bagged a 8.2% stake for nearly $450 million.

The news gave Carnival a boost, with shares trading up more than 20%.

Carnival’s market capitalization is about $6.4 billion, down from $27 billion last year.

The Saudi fund manages more than $300 billion and has taken stakes in companies ranging from Uber to Tesla.

Cruise companies were left out of the $2 trillion US stimulus bill as they are all incorporated overseas to avoid paying US taxes.

This has forced Carnival to secure its own private funding but it is paying a steep price for a reported $6 billion in convertible bonds and a new share issue.

The company said it expects to post significant losses this year but is still unsure how bad it will be.

“We have never previously experienced a complete cessation of our cruising operations, and as a consequence, our ability to be predictive regarding the impact of such a cessation on our brands and future prospects is uncertain,” it said.