GHK-Genting Hong Kong, the biggest cruise operator in Asia, is to get EUR 193 million (USD 227 million) from the government of Germany for its German shipyards (MV Werften), in spite of reservations over state handouts to foreign investors.
The government payment to GHK is expected to allow work at its 3 shipyards in northeastern Germany (grouped under MV Werften) to carry on at least until March 2021.
Genting had applied for EUR 570 million from the COVID stabilization fund of Germany - the largest publicly known request by a foreign company. A decision on whether to grant GHK the full amount requested depends on an assessment of its overall prospects.
The government of Germany created the fund to try to preserve jobs through the COVID-19 pandemic. However, payments to foreign companies like Genting proved contentious, reflecting the fear that taxpayer handouts would flow abroad rather than benefit workers in the country.
Genting purchased MV Werften back in 2016 but the sector has been among those worst hit by the pandemic, darkening the prospects for the 3,100 MV Werften workers.
In August, GHK froze payments to creditors and announced it was seeking a debt restructuring.
The largest opposition party in Mecklenburg-Western Pomerania, right-wing Alternative for Germany, opposed state aid for Genting Hong Kong. Germany's metal union IG Metall has been supportive but pointed out that the aid would only allow the completion of one cruise ship, Crystal Endeavor, with the prospects for a 2nd tranche remaining unclear.
MV Werften is currently building a total of three vessels for GHK - Crystal Endeavor (scheduled for delivery in summer 2021) and Global Dream and Global 2 (TBN) due for completion in 2021 and 2022, respectively.
According to Genting, the deliveries will be delayed by about a year.