Genting Hong Kong held its first creditors’ meeting last week as part of its pursuit of a restructuring. The company had paid bank fees that were due a fortnight ago.
Genting HK had previously reported missing the payment of €3.7m in bank fees relating to its newbuilds Global Dream and a sister vessel.
That of itself put the company into technical default, which in turn makes some other debts repayable “immediately”, although it is up to individual creditors whether they decide to go for immediate repayment. By July 31st the group’s outstanding debt was US$3.37bn.
This week the company reported that it had already been successful in deferring some obligations while it continued to work with its advisors seeking additional equity or debt financing. They reported that they had received interest from private parties to invest in one of their cruise brands. They reported that they believed there is a reasonable prospect that they would obtain funding before June 30, 2021.
While the company said that it was laying up the majority of its cruise ships, they also said they believed cruise operations would resume in January 2021. One of their cruise ships, the Explorer Dream, has been sailing domestic cruises in Taiwan. They report that the ship started operations at 50% of controlled capacity rising to 96% of capacity on the cruise sailing between August 23rd and 26th. Genting also said that it was informed by the Hainan Commercial Bureau (China) that Dream Cruises were welcome to commence domestic cruise operation from Sanya. The group was also negotiating with other regional governments to start domestic cruises.
With operations at its shipyard in Germany suspended since March, Genting reported a $36m EBITDA loss at the yard in the first half of 2020. They said that they were currently applying for long-term funding from Germany’s Economic Stabilization Fund to provide working capital for the shipyard. Genting anticipated that the shipyard would resume work in October 2020.
Chairman and CEO Tan Sri KT Lim said last week that Genting HK would discuss an orderly process for reaching an agreement on what would be a “solvent, consensual and inter-conditional restructuring solution” for the group.
Lim said at the creditors’ meeting that, where the board considered it to be in the best interest of all stakeholders, the board would consider paying interest and charter payments as they fell due, based on pre-existing terms.
Genting HK had appointed PJT Partners as its financial adviser and Kirkland & Ellis as its legal adviser to implement the restructuring.