Asian cruise giant Genting Hong Kong announced on Wednesday it has filed for liquidation in a Bermuda court after banks and a German court frustrated its efforts to unlock much-needed funds for survival.
After a failure by counterparty lenders to release $81m of Genting's own funds held in a liquidity reserve amount, the company said that it had "exhausted all reasonable efforts to negotiate with the relevant counterparties under its financing arrangements".
Genting said it had no access to any further liquidity under any of its debt documents and its available cash balances are expected to run out on or around the end of January.
On top of that, a German court struck down on 17 January Genting's request to draw down an $88m backstop facility provided by the federal state of Mecklenburg-Vorpommern as part of the company's bankrupt MV Werften unit there.
Genting has asked the court to appoint Edward Middleton and Tiffany Wong, both of Alvarez & Marsal Asia, to act as joint provisional liquidators (JPLs) and develop a restructuring proposal.
"The company seeks an order from the Bermuda Court to authorise the JPLs to, among other things, facilitate, and assist the company in developing and proposing, a restructuring of the group's financial indebtedness in a manner designed to allow the company to continue as a going concern, with a view to making a compromise or arrangement with the company's creditors," Genting said.
Alternatively, the company asked that the joint provisional liquidators be authorised to dispose of all or certain of its assets with a view to maximising value and returns for its creditors.
In the meantime, trading of Genting's shares on the Hong Kong Stock Exchange have been suspend.
Board resignations
On Wednesday, Genting's board shrunk by half after three non-executive directors resigned. The members who stepped down — Alan Howard Smith, Lam Wai Hon and Justin Tan Wah Joo — were members of the audit, remunerations and nominations committee.
According to Genting, each of the members who resigned stated that they have "no disagreement with the board" and there was "no matter relating to his [their] resignation that needs to be brought to the attention of the shareholders of the company".
Three executive directors including chairman and chief executive director Tan Sri Lim Kok Thay continue serving on the board.
It is unclear where this development leaves construction of a large cruise ship at MV Werften, which filed for bankruptcy restructuring earlier this month after Genting failed to agree on a rescue package for the company with German federal and state authorities.
Newly installed insolvency administrator Christoph Morgen had stated that he intended to finish building construction of the cruise ship called Global One, which is 75% complete.
Genting Hong Kong, through its subsidiary Genting Cruise Lines, is the largest Asian cruise player, operating a fleet of 10 ocean-going cruise ships spread across the Star, Dream and Crystal cruise brands, and an additional five river cruise ships that operate in Europe.
One of the company's largest ships, the 151,000-gt Genting Dream (built 2016), is leased from a consortium of Chinese banks.
