Genting Hong Kong files for liquidation amid German lawsuit
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.
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.
Genting announced Wednesday, “The Company as well as the Group do not have access to additional liquidity under any Group debt documents. The Company’s current cash balances will run out around the end of January 2022 according the Company cashflow forecasts.”
The firm stated it applied to court to appoint interim liquidators. It also requested authorization for the liquidators’ to handle the company’s restructuring.
For the six months ending June 2021 the company posted a net loss of $238 million, compared with a loss of $742.6 million in the same period last year. Genting Hong Kong suspended payments for debts exceeding $3.4 billion in 2020. according to news reports.