(dpa) – January 13, 2022 – Following the insolvency of Hong Kong-German shipbuilder MV Werften, shares in its parent company, Genting Hong Kong, plummeted when trading in its shares resumed on Thursday.
By the close of trading on the Hong Kong stock market, Genting’s share price had plummeted by 56 per cent. Trading in Genting shares was suspended last Friday, amid legal disputes about the future of MV Werften in Germany, where the company owns three shipyards.
In a message to its investors on Thursday, the group said that there was no guarantee that Genting would be able to service its financial liabilities. It also referred to a German court decision, expected on January 17, on the disbursement of a 78-million-euro (88-million-dollar) loan made to the company by the state of Mecklenburg-Vorpommern.
The undisbursed loans from the German government may seem small compared to some claims that could still come Genting’s way, however.
According to the company, the insolvency of the MV shipyards gives other lenders the right to reclaim funds of up to almost 2.8 billion dollars. So far, however, none of the investors has done so, it added.
Tourism group Genting Hong Kong bought the shipyards in 2016 to build cruise ships for its own Star Cruises, Dream Cruises and Crystal Cruises brands, as well as for Resorts World Manila (RWM).
However, the cruise industry was one of the first affected by the coronavirus pandemic in 2020, and the company, backed by Malaysian casino magnate and billionaire Lim Kok Thay, soon found itself in trouble.
Insolvency applications were filed for eight MV Werften companies at the Schwerin District Court in the German state of Mecklenburg-Vorpommern on Monday, with about 1,900 workers in total.
The Genting Group also owns the Lloyd shipyard in the German port of Bremerhaven, which has gone into insolvency as well.
Staff at MV Werften conducted a meeting with interim administrator Christoph Morgen on Thursday, who said he was expecting their wages for December to come through by Monday.
He also said he was hoping the shipyard could complete the building of the “Global One” cruiser, which is three-quarters finished. With space for some 10,000 people on board it is one of the largest cruiseliners projects worldwide.
The firm’s collapse has caused political ructions. The state parliament in Mecklenburg-Vorpommern conducted a special debate on Thursday.
The conservative opposition has charged the left-wing regional government of not properly engaging with the financial problems faced by MV Werften, a company which has a long history in the state.