Genting Hong Kong may file for provisional liquidation

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The Global Dream at the MV Werften shipyard in Wismar, Germany. The Dream Cruises ship is scheduled to be delivered in 2022.
The Global Dream at the MV Werften shipyard in Wismar, Germany. The Dream Cruises ship is scheduled to be delivered in 2022. Photo Credit: Dream Cruises

Genting Hong Kong, Crystal Cruises' parent company, warned in a filing on Tuesday that it may file for provisional liquidation if it fails to secure funding after the bankruptcy of its German shipbuilding subsidiary.

Genting said in the filing that it has sought access to various alternative sources of liquidity, including trying to access $81 million of its own funds held in a liquidity reserve account. To date, participating banks have not approved such disbursement, creating "an immediate and significant gap" in resources and impacting the company's ability to meet financial obligations, Genting said.

Genting Hong Kong, also parent to Asia's Star Cruises and Dream Cruises, said that if it doesn't receive "credible proposals for a solvent, consensual and inter-conditional restructuring solution," it will potentially proceed with a filing of provisional liquidation in Bermuda, where the company is registered. 

Genting said appointing provisional liquidators is essential to the interests of shareholders and its creditors and to "avoid a disorderly liquidation of the company by any of its creditors." 

The company warned last week that after its German shipyard, MV Werften, filed for insolvency proceedings, Genting was at risk of defaulting on financing arrangements totaling about $2.78 billion.

Genting said Tuesday that following the appointment of provisional liquidators, it would continue to work toward a restructuring to preserve value for all creditors and stakeholders.

The company's shares have been suspended from trading on the Hong Kong Stock Exchange since Jan. 7.

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