INTERNATIONAL. Leisure, entertainment and hospitality group Genting Hong Kong, parent company of Genting Cruise Lines, this week filed a winding up petition with the Supreme Court of Bermuda and appointed liquidators for the business.
The company (which is based in Hong Kong but registered in Bermuda) said that it faced running out of cash by the end of January and would not be able to honour its debts. Genting Cruise Lines is Asia’s largest cruise operator, with a portfolio that includes the Star Cruises, Dream Cruises and Crystal Cruises brands.
The move to wind up the business followed an earlier declaration of insolvency of Genting’s German shipbuilding subsidiary MV Werften, which was US$2.78 billion in debt.
In its filing to the Hong Kong Stock Exchange, Genting Hong Kong said: “As the company and the group have no access to any further liquidity under any of group’s debt documents and the available cash balances are expected to run out on or around end of January 2022 … the board considers that the company will imminently be unable to pay its debts as they fall due.”
It added that Dream Cruises operations would continue in order to “preserve and protect the core assets and maintain the value of the group; however it is anticipated that majority of the group’s existing operations will cease to operate.”
Trading in the shares was suspended on 18 January and will remain suspended until further notice. In its announcements through 2020 and 2021, the group said that its financial results were hit heavily by the COVID-19 pandemic.
Crystal Cruises announced on Wednesday that it has suspended operations for its ocean and expedition ships through to 29 April, with river cruises suspended through to the end of May. In a statement the cruiseline said: “Suspending operations will provide Crystal’s management team with an opportunity to evaluate the current state of business and examine various options moving forward.
It added that Crystal’s three ships currently in operation – Crystal Serenity and Crystal Symphony sailing in the Caribbean and Crystal Endeavor in Antarctica – will complete their current voyages. Crystal Symphony’s current voyage ends in Miami on 22 January, Crystal Serenity in Aruba on 30 January and Crystal Endeavor in Ushuaia, Argentina, on 4 February.
“This was an extremely difficult decision but a prudent one given the current business environment and recent developments with our parent company, Genting Hong Kong,” said Crystal President Jack Anderson.
Genting Hong Kong was incorporated in November 1993, with its Star Cruises line spearheading the emergence of the Asia Pacific cruise business. Later it launched Genting Dream (2016), World Dream (2017) and Explorer Dream (2019) under the Dream Cruises’ brand, with two new Global Class ships set to enter the market.
Genting acquired Crystal Cruises in 2015. In 2016 it established MV Werften, comprising three shipyards in Wismar, Rostock and Stralsund, Germany, following the purchase of shipbuilder Lloyd Werft the previous year.
Travellers International Hotel Group, an associate company of Genting Hong Kong, opened its first land-based attraction, Resorts World Manila, in the Philippines in August 2009.
Commenting on the situation, Bloomberg and The Straits Times said that there would likely be no earnings impact on the Genting group of companies listed in Malaysia and Singapore as these have no cross-shareholdings with Genting Hong Kong. Malaysian-Chinese businessman Lim Kok Thay, Chairman of Genting Group, has substantial interests in each.
