HONG KONG (BLOOMBERG) - Troubled cruise operator Genting Hong Kong has filed to wind up the company after failing to secure funding to help it stay afloat following the insolvency of its German shipbuilding subsidiary.
The filing at the Supreme Court of Bermuda comes after the firm "exhausted all reasonable efforts" to negotiate with its creditors and stakeholders, it said in a statement to the Hong Kong stock exchange on Wednesday.
Genting Hong Kong owns the Star Cruises and luxury Dream Cruises lines which ply the Asia-Pacific, and the luxury Crystal Cruises line headquartered in Miami, Florida.
Genting Hong Kong flagged on Tuesday that it planned to file for provisional liquidation with courts in Bermuda, where its registered office is, unless it received "credible proposals for a solvent, consensual and inter-conditional restructuring solution".
Covid-19 has wiped out travel demand and at the start of the pandemic in early 2020, cruise operations globally were among the first to be halted. Travel restrictions have led to a string of restructurings and insolvencies among travel sector companies.
Genting Hong Kong, which like many operators has offered "seacations" amid a cruise-to-nowhere trend, reported a record loss of US$1.7 billion (S$2.3 billion) in May. The latest liquidation developments come just as Hong Kong reimposes some of its strictest virus curbs since the pandemic began.
Genting Hong Kong's indirect wholly owned shipbuilding subsidiary, MV Werften, filed for insolvency in a local court in Germany last week. That came after salvage talks fizzled amid a dispute between the German authorities and Genting, as both parties blamed the other for MV Werften's collapse.
The Hong Kong cruise firm warned investors that cross defaults amounting to US$2.78 billion may follow.
According to MV Werften's website, the shipbuilder has around 2,900 staff and over the past 75 years has delivered more than 2,500 vessels for deployment in the tourism sector, the Arctic region and the logistics and offshore marine industries from its shipyards in Wismar, Rostock and Stralsund.
Genting Hong Kong said on Tuesday in its exchange filing that a German court had rejected an application that would have provided MV Werften with access to a US$88 million lifeline. "The company considers that it has exhausted all reasonable efforts to negotiate with the relevant counterparties under its financing arrangements," it said in the statement.
Genting Hong Kong is part of Malaysian tycoon Lim Kok Thay's sprawling casino-to-hospitality Genting empire. Mr Lim and his family own 75.5 per cent of Genting Hong Kong and 43 per cent of Malaysian-listed Genting Bhd.
Genting Bhd holds about 52.7 per cent of mainboard-listed Genting Singapore, which owns Resorts World Sentosa.