Global cruise ship giant Genting Hong Kong has filed a petition with the Supreme Court of Bermuda for the winding up of the company after failing this week to secure funding needed to meet its financial obligations.
The winding up petition was one of two actions taken by Genting Hong Kong on Tuesday, with the company also filing a summons to seek the appointment of joint provisional liquidators to develop a restructuring proposal in respect of the company’s debts.
The move follows a decision by a German court on Monday denying Genting Hong Kong’s bid to compel payment of a US$88 million backstop facility, which the company claimed it was entitled to under agreements it signed with the state last year. The court ruled that Genting Hong Kong would not be in a distressed situation without the payment, according to local media reports, despite its German shipyard subsidiaries, MV Werften and Lloyd Werft Bremerhaven, having both filed for insolvency last week.
The cruise ship giant also claimed that it had attempted to access US$81 million of the company’s own money currently held by lenders in a liquidity reserve account under a facility agreement but had been denied by participating banks.
In a Wednesday stock exchange announcement, Genting Hong Kong reiterated that it had “exhausted all reasonable efforts to negotiate with the relevant counterparties under its financing arrangements” and, with available cash balances due to run out by the end of the month, would no longer be able to pay its debts as they fall due.
Instead, it is hoping the appointment of joint provisional liquidators can provide a means to restructure the group’s indebtedness so as to allow the company to continue as a going concern.
Genting Hong Kong had only last year reached various financing arrangements with creditors in relation to debts totaling almost US$2.8 billion.
“The Board believes that the appointment of the joint provisional liquidators is essential and in the interests of the Company, its shareholders and its creditors in order to maximise the chance of success of the financial restructuring and to provide a moratorium on claims by any of its unsecured creditors and to seek to avoid a disorderly liquidation of the Company,” Genting Hong Kong said.
It added that some operations, such as cruises run out of Asia by subsidiary Dream Cruises, will continue in order to protect core assets and maintain value, but said it was “anticipated that the majority of the Group’s existing operations will cease to operate.”
Trading of shares on the Hong Kong Stock Exchange remain suspended.
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