Potential Buyers Emerging for Genting HK’s Global Dream Cruise Ship
The liquidators working on the financial collapse of Genting Hong Kong and its cruise ship and shipyard assets report that potential buyers are showing interest in many of the company’s assets. While there was discussion that the assets in Asia might be refinanced, it increasingly appears that the assets in Germany, including the giant Global Dream cruise ship, as well as those of U.S.-based Crystal Cruises maybe be split up and sold to multiple buyers.
The provisional insolvency administrator Christoph Morgen, a German lawyer appointed to begin the process for MV Werften, told reporters that the sale of the 204,000 gross ton Global Dream cruise ship is one of his priorities. A new owner for the ship could provide near-term employment for many of the 2,000 people that had been employed by MV Werften. Morgen said while there is good interest in using one of the shipyards to build platforms and other elements for offshore wind farms, those projects were unlikely to proceed till late 2023 or 2024.
“There are several serious interested parties,” Morgen told reporters discussing the fate of the Global Dream which was reported to be 75 percent complete when MV Werften closed. “There was a visit to the shipyard on Thursday,” said Morgen, “and more will be announced for Friday.” Bloomberg reported that former Chairman of Genting Hong Kong, Tan Sri Lim Kok Thay, had been the first to express interest in buying the incomplete cruise ship, although there was speculation that he would offer a low price and wanted to move the cruise ship outside Germany for its completion.
Despite saying that several companies have shown initial interest in the Global Dream, Morgen cautions that the ship is highly specialized to the Asian market. He points to the 9,000-passenger capacity and large areas devoted to casinos. Dream Cruises during the construction highlighted that the passenger accommodations were designed for families with 2,500 cabins, many of which were 15 percent larger than cabins found on most other cruise lines. A portion of the cabins were being outfitted with two bathrooms and space for a large sofa that converted to a king-size bed for an additional two guests. Dream Cruises had also reported that the ship would have a “first-ever theme park concept at sea,” complete with the “world’s longest roller coaster at sea,” and other features including a bounce activity park, bungee trampoline, and surf simulator.
Potential buyers could come from China, which had been building its domestic cruise industry before the pandemic, but many of the international brands marketing to the family and contemporary market segment already have ships on order and being built in European shipyards. Another complication may be Genting Hong Kong’s financing for the cruise ship construction. In 2019, Genting Hong Kong secured a €2.6 billion loan from a consortium led by KfW IPEX-Bank for construction and post-delivery financing for Dream Cruises’ two new Global Class ships. The financing package was backed by export credit guarantees of the Federal Republic of Germany and the Finnish export credit agency Finnvera, as well as by a guarantee from the German state of Mecklenburg-Western Pomerania. The banking consortium also included BNP Paribas, Citibank, Crédit Agricole, Credit Suisse, and DNB, with additional syndication expected to include more than ten other German and international banks.
Germany’s Federal Minister of Economics Robert Habeck announced that if Morgen is successful in attracting a stable buyer for the ship the government would consider financing the estimated €600 million required to complete the construction. He cautioned that the buyer would have to be willing to meet Germany’s participation requirements, the sticking point that led to the collapse of the deal to save MV Werften in January 2022.
While they continue to explore the options for the Global Dream and MV Werften, Morgen reports that three buyers have emerged for Lloyd Werft located in Bremerhaven. One of the bidders is reported to be from the UAE interested in continuing to run the shipyard to build mega-yachts and do ship repairs as it had been before the bankruptcy. Morgen speculated that Lloyd Werft will be the first asset to be resolved with a possible deal being agreed soon.
In the United States, Crystal Cruises’ assets have been handed over to a liquidator which is working to sort out the finances of the company and arrange for refunds to travelers holding future reservations. Seatrade Cruise was first to confirm that the former owner of Silversea Cruises, Manfredi Lefebvre d’Ovidio, who remains active in the travel business since selling the cruise line to Royal Caribbean International, made an offer to buy Crystal Cruises. The cruise line’s fate however is complicated because the financial institutions holding the mortgages on the ships marketed by Crystal moved to take control of the vessels effectively already splitting the company apart.
While the German liquidator remains hopeful for quick actions, most analysts expect the cross-defaults and complicated finances will take time to resolve.