KUALA LUMPUR – Genting Hong Kong shares plunged more than 50% after the company announced that it may not be able to meet its financial obligations.
As it resumed trading following a four-day halt today, Genting said in a filing to the Hong Kong exchange that there’s “no guarantee that the Group will be able to meet its financial obligations … as and when they fall due.”
“If the Group is unable to meet its obligations to repay any debts as they fall due or to agree with its relevant creditors on the renewal or extension of its borrowings or any related alternative arrangements, there may be a material adverse effect on the Group’s business, prospects, financial condition and operating results,” it said in the filing as reported by CNBC.
This came as its German shipbuilding subsidiary MV Werften filed for insolvency, sparking a warning from Genting that there could be potential cross-defaults on financing arrangements amounting to $2.8 billion (RM11.7 billion).
Controlled by Malaysian tycoon Lim Kok Thay, the cruise operator has been hit hard by the adverse effects of the pandemic, with the travel industry almost at a standstill.
A subsidiary of the Genting Group, Genting Hong Kong accused a German state of failing to pay out money promised as part of a rescue plan for its now-insolvent shipbuilding subsidiary MV Werften.
AFP reported yesterday that negotiators for Mecklenburg-West Pomerania “presented a mechanism that hid the political motivation”, lawyers representing the group’s Genting Hong Kong unit told a state court in Schwerin, Germany, a day after MV Werften filed for bankruptcy.
The company took Mecklenburg-West Pomerania to court in December for the payment of US$88 million (RM368 million).
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.
A ruling on the case is expected soon. – The Vibes, January 13, 2022
