Genting HK in “careful consideration” of the ability to continue business
Noting the impact of Covid-19, Genting Hong Kong said it saw “material uncertainties” that might cast “significant doubt about the group’s ability to continue as a going concern”.
Genting Hong Kong said in a filing that its directors have given careful consideration to whether the company would have “sufficient financial resources” to continue its business as a going concern.
That was in Genting Hong Kong’s audited financial results for the year 2020. During the year, the casino cruise ship operator recorded a net loss of nearly USD1.72 billion and had net operating cash outflow of USD629.4 million.
As at December 31, its current liabilities exceeded its current assets by nearly USD3.3 billion. The firm was also in default in respect of borrowings in a principal amount of nearly USD3.4 billion.
Genting Hong Kong said in its filing that “In view of such circumstances, the directors of the company have given careful consideration to the future liquidity and performance of the group and its available sources of financing in assessing whether the group will have sufficient financial resources to continue as a going concern.”
The firm noted it had taken several measures to improve its financial position. They included: allotment of new shares in a subsidiary, Dream Cruises Holding Ltd, amending and restating its financial indebtedness and a recapitalization, raising additional liquidity through debt or equity sources, asking some lenders for debt holidays and monetizing non-core assets.
As a cruise giant, Genting Hong Kong controls the Dream Cruises, Crystal Cruises and Star Cruises brands. The firm is also an investor via a joint venture Travelers International Hotel Group Inc in the Resorts World Manila in the Philippines.
Genting Hong Kong stated in its audited first-half numbers, that operations had been strike by the pandemic, which resulted in cancellation of many sailings, and the temporary suspension of almost all of its operations since February 2020, and of its German shipyard operations for about seven months.
The shipyard operations resumed in October 2020, but with limited utilization of facilities. The group was able to continue construction of cruise ships after receipt of a short-term bridging loan for EUR193 million obtained from the German government. But the operator noted that construction of other planned cruise ships were “either suspended or deferred”.
Editing by Rachel Hu