GHK-Genting Hong Kong Ltd filed a winding-up petition in Bermuda following the bankruptcy of its German subsidiary MV Werften triggered USD 2,78 billion (EUR 2,45B / GBP 2,05B) of debt and forced Asia's largest cruise shipowner to be liquidated.
Alvarez & Marsal’s Edward Simon Middleton and Tiffany Wong Wing-Sze have been appointed by the owner of Dream Cruise Holding as provisional liquidators, according to a filing on Wednesday, January 19, to the Hong Kong Stock Exchange.
GHK was not able to secure funds to help it stay afloat after the insolvency of its German shipbuilding subsidiary.
MV Werften, GHK-owned shipbuilder, filed for insolvency in Germany on January 10th, 2022. That came following salvage talks fizzled amid the dispute between GHK and German authorities, as both parties blamed the other for the collapse of MV Werften and the potential loss of ~1900 jobs.
The Hong Kong cruise company warned investors that cross defaults amounting to USD 2,78 billion might follow.
The financial health of GHK deteriorated after the COVID crisis wiped out travel demand and cruises were halted globally.
The company, which offered “seacations” amid the cruise-to-nowhere trend, reported a record loss of USD 1,7 billion in May 2021. The latest developments come as Hong Kong reimposes some of the strictest virus curbs since the crisis started.
GHK revealed on Tuesday, January 18, that a German court had rejected an application that would have provided MV Werften with access to a USD 88 million lifeline.
“The company considers that it has exhausted all reasonable efforts to negotiate with the relevant counterparties under its financing arrangements.
“The appointment of provisional liquidators is essential and in the interests of the company, its shareholders and its creditors in order to maximise the chance of success of the financial restructuring and to provide a moratorium on claims and to seek to avoid a disorderly liquidation of the company by any of its creditors.”