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Genting HK recapitalization tied to $ 2.6 billion in debt
Casino cruise ship operator Genting Hong Kong Ltd says it is looking to “holistic recapitalization†of the group and “change and expand†the group’s “tangible financial debt of approx.
Genting Hong Kong – part of the Malaysia-based Genting Group – controls the Dream Cruises, Crystal Cruises and Star Cruises brands. The company is also an investor in Resorts World Manila Casino Resorts in the Philippines.
The announced deal took place against the background of the Covid-19 pandemic, which “had and continues to have a material impact on the financial position and results of operations of the group”, with many cruise routes worldwide being suspended as a Covid -19 countermeasure.
Genting Hong Kong’s recapitalization package includes changes to the company’s existing financial debt of just over $ 981 million, the group said in a statement filed Friday on the Hong Kong Stock Exchange.
The package includes: “a substantial term extension” of its credit facilities; and “reducing and harmonizing” interest margins for up to 24 months.
The terms include: “Suspension of amortization payment requirements” for nearly $ 1.5 billion of “separate secured funding agreements” entered into by Group companies Dream Cruises, Crystal Cruises and Star Cruises.
These new conditions would either apply until June 23, 2023; or 24 months after the transaction is completed; whatever falls earlier.
Other elements of the package include: a new subordinated secured credit facility of EUR 215 million (US $ 261.5 million) and a “silent partnership” of EUR 85 million.
These items would add EUR 300 million in funding for the group’s indirect, wholly-owned German shipyard, MV Werften Holdings Ltd, provided through the German Economic Stabilization Fund.
This would allow the completion of the “partially completed Crystal Endeavor and Global Dream ships and certain overheads”.
The overall package would also include the provision of a new committed “post-delivery financing facility on essentially market terms” of EUR 280 million for the Crystal Endeavor ship by “certain existing lenders” for the group.
Genting Hong Kong and / or its subsidiaries will also attempt to raise at least $ 154 million in additional liquidity by December 31, 2021.
If the latter remains “unsuccessful,” other options included: equity financing the company for no less than $ 30 million; and standby loans from the state of Mecklenburg-Western Pomerania through the stabilization fund there, worth 124 million US dollars.
The group said they expect the overall transaction to be carried out “as soon as possible in the coming months”.
The group said in its filing that the general recapitalization package will build on the “improved liquidity available to the group” following successful subscriptions by the direct wholly owned entity Ocean World Ltd and Darting Investment Holdings Ltd for new shares in Dream Cruises Holding Ltd, an indirect, not wholly owned subsidiary of the group.
Of this, $ 59 million in new cash was raised and $ 247.9 million in intercompany loans were offset, as indicated in previous filings.
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