The owner of Dream Cruises and Crystal, Genting Hong Kong, has suspended payments on debts of almost $3.4bn, it was reported in Hong Kong today.
The company, backed by Malaysian billionaire Lim Kok Thay and a Malaysian gambling empire, said it would “temporarily suspend all payments to the group’s financial creditors” while restructuring debt.
Dream Cruises was slated for enormous growth after Mr Lim used the Asian Star Cruises brand to expand into cruising, buying up a German shipyard and luxury line Crystal Cruises to produce what was claimed to be Asia’s first luxury cruise line.
Crystal expanded into river cruises and luxury jets, while Dream had on order some of the world’s largest cruise ships.
But Covid-19 has reshaped the future of cruise with hundreds of ships riding at anchor while the world looks for a vaccine.
Dream had tried Taiwan and other destinations, offering its ships as accommadation for migrant workers in Singapore.
Genting Hong Kong, listed on the HK stock exchange, is under the control of Mr Lim, who runs Genting Berhad, a conglomerate of companies with global interests that include the development of a casino resort on the Las Vegas strip.
Genting Hong Kong’s price dropped 38.5 per cent and trading was suspended on Tuesday after the announcement.
Crystal Cruises was forced to issue a statement on Thursday saying it was “not going out of business”.
‘It is important to understand that the company is not going out of business,’ the statement said. ‘Whatever option our parent company pursues, it will allow Crystal to operate its business. Additionally, we have always been committed to honoring our contractual obligations with guests and travel partners, including the processing of refunds.
‘While we have extended our suspension of global voyages until the end of the year, we are working with government and health authorities in our key markets to resume sailing when it is safe to do so and we look forward to welcoming our guests back on board at that time.’
The Financial Times quoted a Moody’s report saying: “The expected weakening in the credit profiles of the Genting group of companies, including the group’s exposure to Singapore and Malaysia, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and the group remains vulnerable if the outbreak continues to spread.”