MV Werften concerned with Genting in legal dispute over grant
Carsten J. Haake, MV Werften, said in an interview with the local NDR news channel that it was not possible to pay salaries today due to certain legal conditions, although he emphasized that there was enough cash. According to Haake, the liquidity amounts to 30 million euros.
Speculations about a possible bankruptcy of MV Werften made the rounds on Friday afternoon in Mecklenburg-Western Pomerania.
Legal dispute over grant payment
The negotiations about the financial support of MV Werften by the state and the federal government have been dragging on for some time.
With the Delta and Omicron variants affecting the recovery of Genting HK’s cruise business, the company sought to mitigate the risk of a breach of its minimum liquidity requirement by drawing on the state-provided € 78 million backstop facility .
In a statement, Genting HK said it had met the conditions for the draw, including $ 30 million in funding provided by majority shareholder Golden Hope in December. The company announced that Mecklenburg-Western Pomerania had set additional requirements for the claim, so that Genting HK went to court.
January 11th court hearing
The Schwerin district court initially sentenced the state to pay the full 78 million.
The state’s 78 million euros are to serve as a backstop until subsidies of 300 million euros are made available by the federal government. In return, the federal government is demanding certain contributions from Genting, as the owner of MV Werften, including € 60 million and a guarantee for the continued existence of MV Werften. The 300 million euros are primarily intended to ensure the completion of Global Dream.
Genting believes that his contributions are already required as a prerequisite for grant fulfillment.
Genting’s lawsuit surprised many in Mecklenburg-Western Pomerania and beyond. Last week, the state’s Department of Commerce expressed concern over the filing of an injunction, but said negotiations would continue.
The Mecklenburg-Western Pomerania Finance Committee dealt with the topic of MV Werften on Wednesday. Finance Minister Heiko Geue emphasized that Genting’s flexibility was important in order to pave the way for federal aid. While most MPs in the state parliament of Mecklenburg-Western Pomerania still support the rescue attempts for the MV Werften, many MPs are dissatisfied that Genting is going to court.
A member of the opposition Alternative für Deutschland, on the other hand, criticized the state government for having no plan B if an agreement was not reached with Genting. Some critics also warn of a “permanent rescue scenario”, since the shipbuilding industry in Mecklenburg-Western Pomerania has been in a challenging situation for a long time. The taxpayers’ association warned against further subsidies, the entire rescue structure for MV Werften was on shaky feet from the start, according to the deputy state chairman.
Bankruptcy would have dramatic consequences
The bankruptcy of MV Werften could be catastrophic for Mecklenburg-Western Pomerania with its ailing economy and high unemployment rate. It would be difficult for shipyard workers to find other employment on site.
In Germany, however, bankruptcy does not necessarily mean the end of a company. It can also pave the way for restructuring. This would not be the first for the MV Werften shipyards.