Genting Hong Kong, the Asian company that owns Crystal Cruises, Star Cruises and Dream Cruises, has filed a Wind Up petition in the Supreme Court of Bermuda asking the court to appoint provisional liquidators saying the company would essentially run out of cash by the end of January.
Genting has a huge fleet and held massive ambitions, planning to build the world’s biggest vessels after buying German ship yards and starting mammoth projects including a 9,000 passenger ship.
It had luxury river ships and even, at one stage, had ambitions to start an airline – mostly bankrolled by its huge Asian casino empire, which is untouched by the troubled cruise and shipbuilding division.
Dream Cruises had made attempts to open up a market in Australia, sending ships down under and attracting a largely Asian clientele. Dream Cruises, officially described as Asia’s first luxury line, with a ship-with-a-ship concept called The palace, had been successfully sailing out of Singapore through the pandemic and opened up. It had recently also opened up cruises to nowhere in Hong Kong.
It is unclear what happens to Australians who may have bought tickets on those cruise. Cruise Passenger has reached out to the company for comment. Dream Cruises has replied here.
The court in Bermuda has two choices: help to restructure the group’s finances and allow it to try and trade through and reach agreements with creditors including at its German shipyards where the German government is holding back on payments and 3,000 jobs could be at risk; or authorise a fire sale of the line’s ships and assets.
That would make Genting the biggest cruise casualty of the COVID crisis still plaguing cruise.
In its filing to the court, Genting Hong Kong said it had “exhausted all reasonable efforts to negotiate” with creditors and that the company has no further access to additional liquidity.
While the filing did say that “certain business activities of the group, including but not limited to the operations of cruise lines by Dream Cruise Holdings, shall continue to protect and preserve core assets,” it continued: “however, it is anticipated that the majority of the group’s existing operations will cease to exist.”
Share trading was halted on the Hong Kong Stock Exchange earlier in the week after problems at the German shipyards surfaced.
Genting Hong Kong was refused a court order in Germany ordering the local state government of Mecklenburg-Vorpommern to pay a backstop loan saying both its shipyards were insolvent. That was the trigger for today’s events.
Genting Cruise Lines includes Star Cruises, Dream Cruises, and Crystal Cruises, along with German shipyards MV Werften and Lloyd Werft, and Resorts World Manila, an associate of the company.
What happens next? Well, the recently launched luxury Crystal Endeavor would be highly sought after, as would the two Dream ships, which are relatively new. Quite who would buy the Star fleet, which is a family operation and has some older vessels, is unknown. But India and the Middle East are looking to start cruise operations.
Dream Cruises are continuing to sail out of Singapore.
As for the Dream megaships – only time will tell who would take on such giants of the seas at a time when cruising is struggling to get back up and running.