Genting Hong Kong will learn its financial fate next week after a German court said it would hand down its ruling on Monday 17 January 2022 around attempts by the company to drawdown a US$88 million credit facility.
The global cruise ship giant launched the legal proceedings after the German government’s export credit insurance agency, Euler Hermes, blocked the drawdown in mid-December by refusing to confirm insurance coverage. That’s despite Genting Hong Kong having previously reached an agreement with the State of Mecklenburg Vorpommern for the provision of the US$88 million in funding – aimed at propping up the company’s Germany shipbuilding entity, MV Werften Holdings Ltd (MVWH).
MV Werften was this week forced to file for insolvency with Genting Hong Kong warning that doing so would 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.
Those agreements had in turn been a response to the group’s announcement 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.
In a Thursday filing, Genting Hong Kong said the “relevant counterparties’ failure to perform their binding contractual obligations have created an immediate and significant gap in the liquidity resources of the Group.”
The company added that while it had not yet received notice that any of the relevant financial creditors is demanding repayment or commencing action against the company pursuant to the terms of their respective financing arrangements, it remained unclear whether or not they may do so.
“The Board continues to be in discussion with its bankers, its shareholder partner in Dream Cruises Holding Limited, an indirect non-wholly owned subsidiary of the Company, and its professional advisers to evaluate options available to the Group,” it said.
