HONG KONG (BLOOMBERG) - Genting Hong Kong chairman and chief executive officer Lim Kok Thay resigned, days after the company filed to wind up its business in one of the biggest stumbles by a cruise operator since the pandemic began.
Mr Lim, who owns 76 per cent of Genting Hong Kong, stepped down with effect from Jan 21, the company said in a stock exchange filing. Mr Au Fook Yew also resigned as deputy CEO and president. Neither man has any disagreement with the board, the company said.
More than two years into the global health crisis, Mr Lim’s company is headed for liquidation - and there are signs that operations are unravelling. United States authorities stand ready to seize a Genting ship in Miami over unpaid fuel bills, while online bookings for some cruises have been suspended. The company’s shares are halted in Hong Kong.
Genting Hong Kong is a stark example of how the virus has brought once-thriving businesses to their knees.
Mr Lim founded in 1993 the company that would later become Genting Hong Kong, partly as a way of diversifying risk away from the Genting group’s flagship casino resort in Malaysia. Some three decades on, the billionaire has resigned and the cruise business is buckling.
Still, the company’s woes may not have major ramifications for other Genting operations. Businesses in Malaysia and Singapore - Genting, Genting Singapore and Genting Malaysia - have no cross shareholdings with Genting Hong Kong except for Mr Lim being a common stakeholder in all four.
While Genting Hong Kong offered “seacations” as part of a broader trend of cruises to nowhere, it still reported a record US$1.7 billion (S$2.29 billion) loss in May and its stock has plunged more than 50 per cent since the start of 2020. The company said in its winding-up petition that its cash was expected to run out around the end of January and it had no access to further funding.
Earlier this month, its wholly owned shipbuilding subsidiary, MV Werften, filed for insolvency in a local court in Germany.
Genting Hong Kong’s troubles reflect an Asian tourism industry that has largely been cautious about reopening. China is pursuing a Covid-zero strategy, and Hong Kong is battling an Omicron outbreak. Cruise operators in other countries, such as Carnival and Royal Caribbean Cruises, are rebounding as markets such as the Americas and Europe adopt an endemic approach to the virus.
Over the weekend, Genting’s Dream Cruises said it has stopped taking new bookings on its website. The company has temporarily suspended bookings until Feb 4, a move implemented to protect the interests of Dream Cruises’ guests, the Strait Times reported, citing the company.
Meanwhile, The Crystal Symphony, a vessel operated by Genting Hong Kong, diverted its final voyage to end in the Bahamas instead of landing on Saturday in Miami as planned.
A US marshall and court-appointed custodian are ready to arrest the ship for US$1.2 million in unpaid fuel bills if it lands in the Florida city after a US federal district judge in Miami issued the arrest warrant for the Crystal Symphony on Thursday last week, according to Mr Stephen Simms, the lead attorney representing Peninsula Petroleum Far East.
The company filed a lawsuit in the US district court seeking to recoup US$4.6 million in total unpaid fees for bunker fuel it has delivered to three of Genting’s ships since 2017.
About 300 passengers on the Crystal Symphony had their voyage extended by a day and were transferred by ferry to Port Everglades in Fort Lauderdale where they were provided transport to local airports, according to a statement from Crystal Cruises. The guests are now on their way home.