A German court has ruled against Genting Hong Kong as the cruise ship operator looks to access US$88 million in funding from the State of Mecklenburg Vorpommern.
Industry media outlet Seatrade Cruise News reported overnight that the court believes Mecklenburg Vorpommern has no obligation to provide the loan under a previous agreement aimed at propping up Genting Hong Kong’s German shipbuilding entity, MV Werften Holdings Ltd (MVWH).
MV Werften filed for insolvency last week with Genting Hong Kong warning that doing so was also likely to trigger events of default events under various financing arrangements it had reached with creditors in 2021 in relation to debts totaling almost US$2.8 billion.
The company is yet to release a statement on the court’s latest finding or whether it plans to appeal.
As previously reported by Inside Asian Gaming, the global cruise ship giant launched legal proceedings after the German government’s export credit insurance agency, Euler Hermes, blocked the drawdown of US$88 million in mid-December by refusing to confirm insurance coverage.
Genting Hong Kong said in a filing last Thursday that the “relevant counterparties’ failure to perform their binding contractual obligations have created an immediate and significant gap in the liquidity resources of the Group.”
According to overnight reports, the state of Mecklenburg Vorpommern had not anticipated Genting Hong Kong requiring the agreed financial support until 2024 with the court not convinced immediate provision of the funding is necessary.
The company has cited the impact of the COVID-19 pandemic on its operations with the US$88 million needed to complete construction of its newest ship, Global Dream.
