Genting’s German shipyard files for bankruptcy

Cruise ship Global Dream earlier under construction at MV Werften (MV Werften)

Posted on January 10, 2022 3:19 PM by

The maritime executive

The German shipyard Genting Hong Kong filed for bankruptcy on January 10 after the Malaysian parent company and German officials failed to reach an agreement on the terms of a state loan to keep operations going. The applications designated as insolvency under German law included the MV Werften Group in the east and Lloyd-Weft in Bremerhaven.

Talks are ongoing to determine the short-term situation. At the end of last week, MV Werften said that its loan threatened to violate the monasteries, which would force the company to postpone the payment of wages to its almost 2,000 employees. After union officials were informed of the bankruptcy filing, union officials said workers were ready to show up at the shipyard tomorrow while state and federal government officials brought up the situation and called for a long-term restructuring of the operation.

An internal announcement circulated to the unions and their members at the end of the day described it as a bitter day, while executives from Genting were quoted in the German media as saying that the government had the number of jobs and the important financial contribution from lost sight of the shipyards. “Without the coronavirus, we would never have asked the government for a single euro,” said Hong Kong President von Genting, Colin Au, in statements published in the German press.

The impasse came with the financial contributions and guarantees that the Genting Confederation insisted on. The state of Mecklenburg-Western Pomerania, in which MV Werften is based, initially provided bridging loans in autumn 2020 in order to resume operations of the shipyard after it was closed during the pandemic. These credits were used to complete an expedition cruise ship for Gentings Crystal Cruises, and in June 2021 it was announced that the federal and state governments had developed a new shipyard restructuring package to help build the first of two giant 208,000 GT Global. complete cruise ships of dreams.

The package has been restructured several times, and last week it was said the government had offered 600 million euros (about $ 675 million) to continue operations. As part of the federal government’s economic stabilization fund, Genting had to invest 20 percent of the loan value. the Global dream Cruise ship would also have served as collateral for the loan.

“The government has done everything to avoid bankruptcy and to save jobs. However, the owners have declined our offer of help and the consequence is bankruptcy,” said Economics Minister Robert Habeck on Monday.

The government reportedly offered to cut Genting’s stake to € 60 million. Genting said it had raised $ 30 million, which was enough to get part of the loan they wanted to draw on in December. Genting has reportedly offered to increase its stake to $ 45 million. Au said Genting made four different offers to the government during the negotiations.

The management of MV Werften has filed for insolvency with the Schwerin District Court. According to German law, insolvency administrators must now be appointed in order to start the restructuring. A government will pay workers unemployment benefits.

The German Prime Minister and tax officials spoke about the situation late Monday and said the focus should be on maintaining jobs and completing the construction of the Global dream Cruise ship. The ship should be 75 percent ready, delivery is expected this year. They are also calling for a long-term restructuring of the company, a possible split of the three shipyards in the east into independent operations and a possible realignment towards the offshore industry. They said it was clear that the shipyards could no longer function in their current structure.

The Lloyd shipyard, which is also part of Genting, also filed for bankruptcy on Monday. The shipyard, which was once a major repair and overhaul operation for the cruise industry, has also increasingly focused on the luxury yacht business. Last year Genting announced they would be closing the Lloyd shipyard, but it was recently reported that they were negotiating to sell the shipyard. A company from the United Arab Emirates has reportedly signed a letter of intent to acquire 50 percent of the shipyard, which employs around 300 people in Bremerhaven.

About Christine Geisler

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