R&I Update - April 2022 – 2 / 6 观点
On 18 January 2022, Hong Kong-listed cruise operator Genting Hong Kong Limited ('Genting HK') filed for provisional liquidation with the Supreme Court of Bermuda after it failed to secure access to liquidity. Provisional liquidators have then been appointed for the restructuring of Genting HK.
Genting HK started “Star Cruises” in Hong Kong in the early 1990s. As a leader in Asia’s modern cruise industry, it surprised the cruise industry in 1999 by making a successful bid to acquire U.S.-based Norwegian Cruise Line which was struggling, and successfully revived it. Several cruise brands were launched in the 2010s, including “Dream Cruises” in China, making it one of the biggest cruise operators in the world.
Like most cruise companies, Genting HK struggled during the COVID-19 pandemic. While other major cruise operators have resumed sailings as the pandemic restrictions eased, Hong Kong’s COVID-zero policy hampered Genting HK’s recovery.
In August 2020, Genting HK was forced to suspend all payments to creditors in an effort to shore up its liquidity. As it could not meet creditors’ demands, its wholly-owned German shipbuilding subsidiary, MV Werften Holdings was pushed into liquidation. On 10 January 2022, MV Werften Holdings announced its insolvency after rescue package negotiations with the German government failed. The developments in Germany triggered a cross-default of Genting HK’s US$2.78 billion borrowings which led to it filing for provisional liquidation.
This marks the highest-profile financial casualty within the cruise industry since the start of the pandemic. Given the global scale of Genting HK’s business, it will be intriguing to see how the insolvency proceedings in multiple jurisdictions play out.