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Genting Hong Kong files for liquidation amid German lawsuit

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When berthed in Hong Kong by the Genting Cruise Lines Genting Dream on Wednesday, July 28, 2021, this is Hong Kong’s skyline.

Lam Yik | Bloomberg | Getty Images

Operator of cruises Genting Hong KongThe company filed for bankruptcy Wednesday, as it expects its cash to be exhausted by the end January.

This follows the success of warnings last week from the companyIt could be subject to cross-defaults of $2.8 billion in funding arrangements due to its German shipbuilding affiliate MV Werften.

Genting stated in a Wednesday filing that the company would “imminently not be able to pay its debts, as they fall due” as liquidity drys up.

After the cruise operator was unsuccessful, it applied to the Supreme Court of Bermuda to dissolve the company.

Genting Hong Kong is part a larger conglomerate, which also includes Genting Malaysia and Genting Singapore. Among its assets, the conglomerate owns the Resorts World leisure park chain, which includes those in Singapore, New York City, the United Kingdom. The conglomerate also owns 30 casinos in the U.K.

Lim Kok Thay, a Malaysian tycoon, controls the company. Travel was stopped in Malaysia and Covid-19 has had a devastating effect on it.

Germany: Legal struggle

Genting Hong Kong was in the middle of legal proceedings with a regional government in Germany to drawdown a $88 million backstop facility – or backup funding for a secondary source of repayment – that’s related to MV Werften.

But in a ruling this week, the German federal state of Mecklenburg-Vorpommern rejected Genting’s application to access the $88 million, according to Genting’s filing earlier this week.

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