Genting Hong Kong suspends all payments to financial creditors
Genting Hong Kong Limited has decided to temporarily suspend all payments to the group’s financial creditors as it works to preserve liquidity during a very tough time for the company suffering from a massive impact from the COVID-19 pandemic on its operations.
The cruise shipping major had to suspend all its sailings globally due to the pandemic’s impact depleting the company’s revenue inflow.
Given the ongoing uncertainty of the situation, Genting Hong Kong issued profit warning announcements with regard to its six-months results.
Due to a material impact on its finances from the ongoing situation, the cruise operator asked its funding advisors to arrange a fundraising exercise for the group, however, the outcome of such exercise is still uncertain.
“The company’s remaining available cash will be reserved to maintain critical services for the group’s operations, while the company will endeavor to negotiate a holistic debt restructuring solution for the current financial indebtedness of the group and continue to engage with interested parties identified by the funding advisors,” the company said.
As informed, the company’s two subsidiaries Dream Global One Limited and Dream Global Two Limited were required to pay fees worth EUR 3.7 million in connection with the financing of the construction of certain ships.
The company has two cruise ships under construction, Crystal Endavor and Global Dream. Crystal Endeavor was scheduled to deliver in August this year, while Global Dream was scheduled for delivery in 2021.
It is yet to be determined how the latest developments would impact the delivery dates.
The companies defaulted under the related finance documents and due to the latest decision the company is likely to default on other obligations as well.
As of 31 July 2020, the outstanding financial indebtedness of the group stands at $3.37 billion.
The company intends to invite all of its financial creditors to a virtual meeting to update them on the situation and restructuring and/or refinancing options in respect of the group’s financial indebtedness.
Genting Hong Kong joins its western counterparts Carnival and Royal Caribbean, among others, as it announces steps to preserve cash and bolster liquidity at a time of an unprecedented crash of the cruise market.