Genting Hong Kong subsidiary Dream Cruises has filed to wind up its business although the parent company previously said two weeks ago that the cruise operation would continue.
In an announcement on the Stock Exchange of Hong Kong, Genting Hong Kong said it had filed a petition in the Bermuda Court for the appointment of joint provisional liquidators (JPL) of the company. The JPL application had triggered further insolvency events of default or termination events under all of the outstanding debt instruments of Dream Cruises and its subsidiaries.
It added that a consensual restructuring will present higher recoveries to all creditors and stakeholders compared to a value-destructive liquidation of the Dream Sub-Group, which is the likely alternative outcome. "The Dream Sub-Group remains valuable, and there are transactions which can be pursued which are likely to realise better value for the Dream Sub-Group’s creditors than a formal and terminal liquidation scenario," the announcement said.
Currently, the management of Genting Hong Kong and Dream Cruise is discussing with the JPLs to assess the financial condition of the company and the Dream Sub-Group, and to identify potential remediation plans. At the time of writing, Dream Cruises' website does not allow any booking although it still offers information about its experiences and discounts.
In January, Genting Hong Kong filed to close down its business as it said it would run out of cash as of January 2022, although it stated that its operations of cruise lines by Dream Cruises will continue. Shortly after, Malaysian billionaire, Lim Kok Thay, resigned from his position as chairman and CEO for Genting Hong Kong. According to Bloomberg, Lim owns 76% of Genting Hong Kong. Deputy CEO and president, Au Fook Yew, also resigned from his post.
Genting Hong Kong explained previously that it had exhausted all reasonable efforts to negotiate with relevant counterparties under its financing arrangements. However, it failed to reach an agreement with various creditors and other stakeholders. As a result, Genting Hong Kong had no access to any further liquidity under any of the group’s debt documents.
Cruise operators in Hong Kong encountered service disruption since the launch of the "Cruise-to-nowhere" last year. Currently, they are not allowed to operate amid the fifth wave of the pandemic in Hong Kong. On the other hand, Royal Caribbean said it will move its "Spectrum of the Seas" from Hong Kong to Singapore to take over the operation of "Quantum of the Seas", on 11 April 2022.
Meanwhile, in a previous statement to MARKETING-INTERACTIVE, Michael Goh, president of Dream Cruises and head of international sales, Genting Cruise Lines said the pandemic forced Dream Cruises to ramp up its digital and content marketing efforts, and it is banking on the powers of celebrities and key opinion leaders to create awareness and reinforce its brand positioning.
"Right now, we are continuing our digital efforts and highlighting the high standards of preventive and safety measures that we have in place to instill confidence and peace of mind," he said. "Complementing our digital marketing, we will continue to also maximise our exposure through both online and offline media platforms such as print, radio and TV. We are also working closely with our travel partners to equip them with training and right collaterals on the enhanced measures in place," Goh said in November 2020.
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