Genting Hong Kong gets interest from investors for cruise brand

Genting Hong Kong said it has suspended all payments to creditors, blaming its cash crunch on the coronavirus pandemic.
Genting Hong Kong said it has suspended all payments to creditors, blaming its cash crunch on the coronavirus pandemic.PHOTO: GENTING HONG KONG

HONG KONG (BLOOMBERG) - Cruise ship operator Genting Hong Kong has received indicative letters from private investors interested in investing in one of its cruise brands, the company said in a filing to the Hong Kong Stock Exchange dated Aug 28.

The firm, controlled by Malaysian tycoon Lim Kok Thay, said "there is a reasonable prospect that the group will be able to obtain the funding" by June 2021. The company announced the development when reporting a wider first-half net loss of US$687.1 million (S$934.2 million) from US$55.2 million a year ago.

Genting Hong Kong said earlier this month it has suspended all payments to creditors, blaming its cash crunch on the coronavirus pandemic. The company said it owed a total of US$3.4 billion as at July 31. Its shares are down 58 per cent this year, battered by lockdown measures and travel curbs across the globe.

The cruise operator is also negotiating a further loan deferment of US$97 million with lenders after it deferred US$85 million from certain lenders before June 30 this year, according to the filing. Some of Genting Hong Kong's creditors have formed an ad hoc group to discuss a restructuring solution with the company's advisers.

The company said the majority of its capital commitments of about US$1.3 billion as at June 30 will be delayed in view of suspended ship construction activities.

Genting Hong Kong also said its shipyard operations are suspended and expects them to resume in October. The company, which owns the MV Werften shipyards in Germany, said it is applying for long-term funding from the German government's Economic Stabilization Fund for its shipyard operations.

The company said there is "a reasonable prospect" that it will have sufficient working capital and cash flows to fulfill its financial obligations as and when they fall due in the 12 months till 30 June 2021, if it succeeds in implementing measures and plans including controlling capital expenditure and seeking fresh funding.