$ 2.6 billion recapitalization for Genting Hong Kong

On December 31, Genting HK’s liabilities exceeded assets by $ 3.26 billion.

Subject to the final approval of certain creditors and stakeholders, the restructuring is to be implemented as soon as possible in the coming months.

This builds on the group’s recent liquidity surge following new share subscriptions from Dream Cruises by investment group Darting and Ocean World, a subsidiary of Genting HK. This raised $ 59 million in new cash for Darting, while Ocean World canceled nearly $ 248 million in intercompany loans.

The recapitalization includes a new secured subordinated loan facility of € 215 million and a silent participation of € 85 million. which takes effect by providing an equity stake with limited recourse to the lender in exchange for the provision of funding.

300 million euros new funding from the German WSF

There are 300 million euros in new funds from the German Economic Stabilization Fund (WSF) for MV Werften and / or certain subsidiaries to complete the construction of Crystal Endeavor and Global Dream. This is guaranteed by Genting HK and certain wholly owned subsidiaries of MV Werften and secured by a combined safety and guarantee package.

The recapitalization will also change the terms on debt of $ 981.05 million to include a substantial extension of the life of the facility and the reduction and harmonization of interest margins for up to 24 months.

The obligation to repay nearly $ 1.5 billion in separate secured funding agreements from Dream Cruises, Crystal Cruises and Star Cruises will be suspended until June 29, 2023, or the date that is 24 months after the recapitalization implementation date.

All guarantees and collateral under the company’s existing financing arrangements are withheld, along with the implementation of limited credit enhancement agreements, including Granting of new securities and assignment of rights.

Global dream and crystal effort

Genting HK will continue to be available for pre-delivery drawdowns under existing financing arrangements to complete Global Dream. And a new committed funding facility of € 280 million for Crystal Endeavor on essentially market terms will be provided by certain existing lenders. This possibility is guaranteed by the company.

The reorganization also includes the suspension of the review of financial ratios under all existing financing agreements of the Group, the financial ratios up to the 29 contract, which will be reset to an appropriate level.

Financial metrics will be fully reset by June 29, 2023, or the date that is 24 months after the recapitalization implementation date, to enable a fully funded business plan that is aligned with the expected market rebound.

Genting HK is seeking additional liquidity of $ 154 million this year

In addition, Genting HK and / or its subsidiaries will endeavor to raise at least $ 154 million in additional liquidity by December 31 of this year. If unsuccessful, the company will conduct additional liquidity-raising transactions, including at least $ 30 million equity financing and raising conditional committed standby credit facilities of $ 124 million.

Badly hit by the pandemic, Genting HK last August called on creditors to set up a steering committee for restructuring.

Last month, the company reported an unaudited net loss of $ 1.7 billion for 2020.