Genting Hong Kong’s Germany-based ship-building subsidiary MV Werften Holdings Ltd (MVWH) filed for bankruptcy protection on Monday but the situation could have been avoided with a little more help from above if the German government is to be believed.
According to a report by Associated Press, German authorities have laid the blame for the shipyard’s collapse at the feet of Genting Group and its Chairman and CEO Lim Kok Thay. It is claimed that the government had been willing to discuss a €600 million (US$678 million) bailout plan but wanted Genting to contribute 10%, which the company refused to do.
“The German government did everything to prevent the insolvency of MV Werften and thereby save jobs,” said Economy Minister Robert Habeck. “However, the owners rejected our offer of help; the bankruptcy application is the result.”
Another Genting Hong Kong shipyard, Lloyd-Werft in Bremerhaven, is also said to have filed an insolvency application on Monday.
MV Werften’s financial woes relate to construction of a new cruise ship, Global Dream, which the company says is 80% complete. With capacity for 5,000 passengers, the ship had originally been planned to set sail in 2021 but construction was delayed due to the global COVID-19 outbreak.
Genting Hong Kong subsequently revealed in August 2020 that it was suspending all payments to financial creditors in order to preserve liquidity due to the impact of the COVID-19 pandemic on its businesses.
As reported by Inside Asian Gaming, the company announced in June 2021 that it had finalized a series of agreements with those creditors for granting new loans and extensions to maturities related to US$2.6 billion of debt.
Among the agreements was a €300 million (US$340 million) grant from Germany’s Economic Stabilization Fund to help fund completion of Global Dream. However, it was reported this week that an attempt by the company to draw down US$88 million of the grant in mid-December resulted in authorities claiming it had not met the conditions required to access the loan.
Genting Hong Kong reported a US$283.3 million loss for the six months to 30 June 2021, coming off a US$1.72 billion loss in FY2020.