Genting Hong Kong warns there is “no guarantee” it can pay debts

| By Marese O'Hagan
Genting's cruise ship subsidiary Genting Hong Kong has stated that there is “no guarantee” it will be able to fulfill its financial obligations after its wholly owned subsidiary MV Werften filed for insolvency earlier this week.

Hong Kong-German ship construction company MV Werften filed for insolvency on January 10, triggering HK$2.77bn ($355.6m/€310.2m/£259.2m) worth of defaults on debts now owed by the Genting Hong Kong business.

This happened after MV Werften failed to secure €1.35bn in funding for the construction of Genting Hong Kong’s Global One cruise liner.

According to a company press release, no relevant creditors have demanded repayment as of yet.

A filing to the Hong Kong Stock Exchange today (January 13) revealed that the Genting Hong Kong’s drawdown of a USD$88m backstop facilitated by the State of Mecklenburg-Vorpommern is pending a court ruling which is expected to be released on January 17.The case was heard on January 11.

The business said that if the drawdown is not approved, “there is no guarantee that the group will be able to meet its financial obligations under its financing arrangements as and when they fall due”.

The business added that if it cannot pay its debts, “there may be a material adverse effect on the Group’s business, prospects, financial condition and operating results”.

Genting Hong Kong also sought additional sources of liquidity. These included a €108.0m “milestone payment” drawdown amount in relation to the €1.35bn loan agreement for the unsuccessful Global One vessel construction, and a €30m “silent participation” fund in relation to €300m in Economic Stablisation Funds (ESF) financing.

The following day, Genting Hong Kong learned that the milestone payment would not be paid.

Trading of company shares on the Hong Kong Stock Exchange was suspended from 9:00am on January 7. It resumed today at 9:00am.

Genting Hong Kong is part of the wider Genting Group that operates the Resorts World brand of casinos as well as casinos in its own name.

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