Genting Hong Kong shares plunged 56 per cent after the company’s shipyard located in Germany filed for bankruptcy.
Hong Kong.- After a four-day halt in trading when MV Werften Holdings Ltd (MVWH) announced it filed for insolvency, Genting Hong Kong shares plunged 56 per cent.
Genting Hong Kong stated the company couldn’t reach an agreement with German authorities to get financial assistance to finish the building of a massive cruise liner.
Through a statement, the company also said there’s “no guarantee that it will be able to meet its financial obligations… as and when they fall due”.
A legal battle involving a US$88m loan arrangement related to its German shipbuilding unit is still awaiting a ruling by a German court scheduled for January 17.
The result is crucial amid its broader debt crisis, as the company stopped making payments to creditors totalling US$3.4bn in August 2020, an amount that was in arrears as of December 31 of that year.
The company said it had not received notice from creditors seeking repayment or filing a lawsuit against the company over its financial arrangements as of Thursday’s filing.
It added that it was unclear whether any of the relevant creditors would choose to do so.
Last December, Genting HK also said that a company related to its chairman Tan Sri Kok Lim had agreed to provide a bridge loan of $30m as part of a restructuring plan reached with creditors.
The group’s financial woes have also sparked the bankruptcy filing of Lloyd Werft Bremerhaven AG, another shipyard Genting HK owns in Germany.
Throughout 2020 and 2021 the company was seriously affected by the suspension of Crystal Cruises and Star Cruises operations due to the Covid-19 pandemic.