Global cruise ship operator Genting Hong Kong says it remains confident of gaining the approval of additional lenders to proceed with a restructuring and recapitalization of debts as it looks to avoid insolvency as a result of the COVID-19 pandemic.
The comments come after Genting Hong Kong issued its audited financial results on Sunday, confirming a group-wide net loss of US$1.72 million in FY2020 while also revealing the existence of significant doubt over its ability to continue as a going concern.
That doubt is based on current liabilities as of 31 December 2020 totalling US$3.38 billion – more than the group’s US$3.27 billion in current assets – as well as capital commitments of US$1.20 billion and deposits, cash and bank balances of just US$242.8 million.
“In view of such circumstances, the directors of the Company have given careful consideration to the future liquidity and performance of the Group and its available sources of financing in assessing whether the Group will have sufficient financial resources to continue as a going concern,” Genting Hong Kong said in Sunday’s audited results announcement.
Having announced last August it was suspending all payments to financial creditors in order to preserve liquidity, Genting Hong Kong informed investors earlier this month that it had reached an agreement with certain creditors to undergo a “holistic recapitalization” that would see the company granted extensions to maturities around its debt.
According to Sunday’s audited results, those creditors only represent borrowings of US$1.74 billion, however the company added that negotiations are now underway to bring more lenders into the fold representing another US$735.7 million in debt.
“The Directors believe there is reasonable prospect that approvals from these financial creditors will be obtained,” Genting Hong Kong said, and that “the Group will have sufficient cash flows to meet its operating requirements, investing activities and financial obligations for at least 12 months from the date of the approval of these consolidated financial statements.”
Genting Hong Kong has already relaunched some cruise ship operations out of Taiwan and Singapore as well as offloading some non-core assets such as nightclub brand Zouk and a stake in a luxury yacht manufacturer based out of Singapore.