KUALA LUMPUR – Following a more than 50% plunge in shares and a loss in court, Genting Hong Kong will be filing for liquidation of its cruise line on Tuesday in Bermuda.
In a filing with the Stock Exchange of Hong Kong signed by Genting controller Lim Kok Thay, Genting HK said it will proceed with the filing, unless funding relief emerges at the 11th hour.
“The board believes that 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,” Lim said as reported by Nikkei Asia.
In the same filing, Genting HK said three independent directors who formed half of its board had quit, leaving behind Lim and two other company executives.
Nikkei Asia then reported a German court had on Monday ruled in favour of the state of Mecklenburg-West Pomerania, rejecting a request for payment claimed by Genting HK.
In December, Genting HK had taken the state to court and demanded a payment of US$88 million (RM368 million).
A subsidiary of the Genting Group, Genting HK accused the German state of failing to pay the money promised as part of a rescue plan for its now-insolvent shipbuilding.
Lawyers representing Genting HK told a state court in Schwerin, Germany that negotiators for Mecklenburg-West Pomerania “presented a mechanism that hid the political motivation”.
The money Genting HK claimed dates back to an agreement with the government in June to provide a bridging loan for the struggling dockyard operation on the Baltic coast.
The company had previously issued a warning of potential cross-defaults on financing arrangements amounting to US$2.8 billion following its decision to put its German shipbuilding business, MV Werften, into insolvency.
German officials reportedly blamed the insolvency on Genting HK’s rejection of a financial plan offered by the new government that took office last month.
The plan would have required Lim to inject US$68.47 million more and guarantee the repayment of at least €600 million (around RM2.9 billion) of new government loans.
Lim was only willing to put in US$12 million and wanted the government to clear the release of funds from earlier loans. – The Vibes, January 18, 2022
