Cruise line Genting Hong Kong has filed for closure of its business as it runs out of cash from January 2022. However, its cruise operations Dream Cruises Holding lines will continue.
In an announcement uploaded to HKEXnews, Genting Hong Kong said it had exhausted all reasonable efforts to negotiate with relevant counterparties under its financing agreements. However, he failed to reach an agreement with various creditors and other stakeholders. Accordingly, Genting Hong Kong did not have access to any further liquidity under any of the group’s debt securities.
The company is expected to run out of cash by the end of January 2022 at the latest, according to its cash flow forecast, as it must pay ongoing operating expenses and potentially required payments of certain debts that are expected to be made. Looking ahead, Genting Hong Kong’s board of directors estimated that the company would be unable to pay its debts as they fell due.
Genting Hong Kong filed a summons with the Supreme Court of Bermuda on Jan. 18 seeking the appointment of joint provisional liquidators to develop and propose any restructuring proposals regarding the company’s debts and liabilities.
The board of directors of the company considered that the appointment of the provisional co-liquidators was essential and in the interest of the company, its shareholders and its creditors in order to maximize the chances of success of the financial restructuring.
Meanwhile, its Dream Cruises brand will be part of some of Genting Hong Kong’s business operations that will continue to operate as part of its efforts to “preserve and protect core assets and maintain value.” However, the company added that the majority of its existing operations will cease to operate.
Dream Cruises is one of the brands that operate cruise services to nowhere in Hong Kong. However, as Hong Kong implements one of the strictest COVID-19 prevention and control measures in the world, cruise operators can only offer limited services. For example, Royal Caribbean International announced the cancellation of its Spectrum of the Seas sailings to Hong Kong scheduled for January 2022. The sailings were canceled after an update to local COVID-19 prevention policies by the Hong Kong government. Kong on January 14. The measures require an extension of enhanced social distancing measures, including the suspension of all cruise operations, until February 3.
Finally, a Bloomberg report said Genting Hong Kong’s wholly-owned indirect shipbuilding subsidiary, MV Werften, filed for insolvency in a German court last week. MV Werften has more than 2,800 employees and works with more than 600 business partners.
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