Cruise ship builder MV Werften files for insolvency

Germany-based cruise ship builder MV Werften filed for insolvency on Monday January 10th after negotiations between the German government and the shipyard’s owner, Genting Hong Kong, failed to reach an agreement over financing for the remaining construction of the Global Dream, a “Global class” cruise ship being built for Dream Cruises, another Genting Hong Kong subsidiary.

A German court will rule next week in a case brought by Genting Group against the German regional government of Mecklenburg-Vorpommern.

Genting’s subsidiary Genting Hong Kong said on January 11th that the German government and the German federal state of Mecklenburg-Vorpommern had withheld a total of $336m promised funding.

Included in that was an $88m backstop facility from Mecklenburg-Vorpommern Which Genting Hong Kong said it was due to draw down, but that in December the German state imposed additional pre-conditions.

The German government has said Genting Hong Kong had turned down aid that was offered to it. A ruling from the court is awaited.

Genting Hong Kong also said in a regulatory filing on January 11th that MV Werften’s insolvency led to defaults under its “Global 1” credit facility, which would in turn lead to further defaults on financing arrangements, worth a total of around $2.8bn.

The collapse leaves the fate of the shipyard and its 2,000 employees uncertain.

Germany’s Federal Minister for Economic Affairs, Robert Habeck, blamed Genting for the insolvency and potential loss of jobs, according to reports in German media.

MV Werften was formed in 2016 with Genting Hong Kong’s acquisition of Nordic Yards’ three shipyards in Wismar, Rostock-Warnemunde and Stralsund, Germany. Since 2017 the shipbuilder had delivered four Rhine class river cruises and a polar-class luxury expedition vessel (the Crystal Endeavor, theoretically a “yacht”) for Crystal Cruises, which is also a Genting Hong Kong company.

The Global Dream, when completed, would have 208,000gt and would be 342 metres long. It would be able to carry up to 9,500 passengers. The construction of the vessel has been taking place at the Rostock and Wismar shipyards, where it was reported to be about 75% completed.

The delivery of the Crystal Endeavor, the world’s largest luxury expedition yacht, took place from the Stralsund yard in June 2021, but only following a €193m German government loan issued in October 2020 to help fund the remainder of construction and shipyard operations through to March 2021.