Hong Kong-listed gaming cruise ship operator Genting Hong Kong Ltd, owned by Genting Bhd, a major Malaysian company, is on track to complete liquidation proceedings after the company filed for bankruptcy in a Bermuda court on January 18 this year .
Many Genting Hong Kong subsidiaries are also in liquidation proceedings
Genting Hong Kong Ltd is attempting to satisfy its creditors by selling off its assets with the aim of maximizing returns. The various sales deals, which include some of the company’s ships, are at various stages, but most are almost complete.
The dealings related to the company’s insolvency are being conducted by insolvency practitioners who have determined that the group is no longer offering cruise services and will not be able to resume such services in the future. The bankruptcy trustees were appointed to the bankruptcy proceedings on Jan. 20 after the company filed for liquidation in a Bermuda court on Jan. 18 and suspended sales of its shares on the Hong Kong Stock Exchange on the same day. The company has struggled with the challenges of the COVID pandemic and after its unit in Germany, whose core business was building cruise ships, defaulted on payments, Genting Hong Kong followed suit.
As a result of Genting Hong Kong’s liquidation proceedings, many of the company’s subsidiaries in the countries in which they are registered have also initiated such proceedings. So far, those are Australia, Hong Kong, Malaysia, Singapore and the United States, while trustees expect other subsidiaries of the group to also declare default.
The insolvency of the cruise ship builder MV Werften
Back in January, Genting Hong Kong, owner of cruise ship builder MV Werften, entered a legal battle with the German state of Mecklenburg-Vorpommern over expected $336 million in government funding. The promised funding included an $88 million backstop facility that Genting Hong Kong had to draw down.
The legal battle ended in a German regional court, which ruled in favor of the government, finding that the state was under no obligation to make any payment on the loan. This resulted in the liquidation of MV Werften, resulting in insolvency related to Genting Hong Kong’s Global 1 credit facility, which in turn led to other defaults in funding other financing agreements. Consequently, all these factors contributed to the liquidation of Genting Hong Kong.
