Cruiseship group Genting Hong Kong has sealed what it calls a $2.6bn recapitalisation to counter the effects of coronavirus restrictions on its business.
The deal includes new financing and extensions of existing debt following a period when the pandemic "has had, and continues to have, a material impact on the financial position and results of operation of the group", Genting said.
The company has spent a significant period of time in intensive negotiations with stakeholders to achieve a "holistic, solvent" solution, the company added.
The recapitalisation should be executed in the coming months, Genting said.
Stable runway
Chief executive Tan Sri Lim Kok Thay said the transactions would provide "further capital and stability to the group in order to create a stable runway to execute a fully funded business plan aligned with anticipated market recovery as Covid-19 restrictions ease".
The first part of the refinancing is a new €215m ($261m) loan, as well as €85m of "silent participation", from the German Economic Stabilisation Fund (WSF).
This will go to Genting's German shipyard MV Werften.
The "silent" portion of this deal will see WSF take a stake in the yard.
The money will be used to finance the partially completed cruiseships 19,500-gt Crystal Endeavor and 204,000-gt Global Dream.
Existing banks are also providing €280m of post-delivery financing for the Crystal Endeavor.
In October, MV Werften said it was to receive a €193m bridging loan from WSF.
Extra time to pay
Genting is also stretching the maturity of all its existing $981m debt for two years, and reducing interest rates.
In addition, lenders will halt repayments under another $1.5bn of secured loans entered into by subsidiaries Dream Cruises, Crystal Cruises and Star Cruises for two years.
Covenants left alone
Financial covenant testing will be suspended for two years and there will be a "full reset" of covenants from June 2023 to "reflect appropriate ratios" in future, Genting said.
The group will also seek at least $154m of additional liquidity by 31 December.
If it does not manage this, the shipowner will try for a share sale of at least $30m and tap into $124m of standby funds available from Germany's state of Mecklenburg Vorpommern and WSF.
The transactions build on the improved liquidity brought about by Genting unit Ocean World and Darting Investment Holdings buying new shares in Dream Cruises, which raised $59m.
Genting restarted limited cruising last July.
Two Dream Cruises ships are sailing on what are deemed domestic voyages out of Taiwan and Singapore.
To date, neither ship has reported a single Covid-19 case.
