Hong Kong-listed gambling cruise ship operator Genting Hong Kong Ltd, which is part of Genting Bhd, a major Malaysian corporation, is on its way to completing the liquidation procedure after the company filed for insolvency at a Bermuda court on January 18 this year.
Many Genting Hong Kong Subsidiaries Are Also in Liquidation Proceedings
Genting Hong Kong Ltd is trying to satisfy its creditors through a sale of its assets aiming for maximum returns. The various sale deals, which also include some of the company’s ships, are at different stages, however, most of them are almost completed.
The operations in connection with the company’s insolvency are being executed by liquidators who have noted that the group is no longer offering any cruise ship services and will not be able to resume any such services in the future. The liquidators were mandated for the insolvency proceedings on January 20 after the company filed for liquidation at a Bermuda court on January 18 and suspended the sales of its stocks on the Hong Kong Stock Exchange on the same day. The company has been experiencing difficulties with the challenges of the COVID pandemic and after its unit in Germany, whose main business activity was to build cruise ships, defaulted, Genting Hong Kong also went down that path.
As a result of Genting Hong Kong’s liquidation procedure, many of the subsidiaries of the company have also entered into such procedures in the countries where they are registered. So far, the territories in question are Australia, Hong Kong, Malaysia, Singapore, and the United States, while liquidators expect other subsidiaries of the group to declare default as well.
The Default of Cruise Ship Builder MV Werften
Back in January Genting Hong Kong, which is the owner of the builder of the cruise ships MV Werften, entered a court battle with the German state of Mecklenburg-Vorpommern over expected funding from the state amounting to $336 million. The promised funding included a backstop facility amounting to $88 million that Genting Hong Kong had to draw down.
The dispute ended in a German district court, which ruled in favor of the government, noting that the state was not obliged to make a payment on the loan. This resulted in the liquidation of MV Werften, which brought insolvency in connection with Genting Hong Kong’s credit facility “Global 1”, which in turn led to other failures to cover further financial arrangements. Consequently, all of these factors contributed to the liquidation of Genting Hong Kong.