Genting Hong Kong says creditor response positive despite US$743 million net loss in 1H20

Asian cruise ship operator Genting Hong Kong has described its creditors as being supportive of efforts to restructure its debt coverage following the suspension of all loan repayments due to growing financial pressures brought about by COVID-19.

The company met with creditors in a virtual meeting last Monday at which it had stated its intention to provide further information on the current status of the Group’s operations and finances, along with restructuring and refinancing options.

Providing an update on Friday following publication of its 1H20 financial results, which saw it fall to a consolidated net loss of US$742.6 million, Genting HK revealed it has engaged strategic advisory group PJT Partners and law firm Linklaters to “work with its financial creditors to agree and implement a consensual solvent restructuring solution, which preserves as much value as possible for lenders while restoring the Group’s viability once COVID-19 has been brought under control.”

While offering little detail of the outcome of last week’s creditors’ meeting, the company added that its financial creditors “have been supportive and a number of the Group’s long term financial creditors have agreed to join an ad hoc group to extend their support to the Group.”

Genting HK had previously investigated other fund raising options but said it needed more time to assess potential opportunities.

The company operates three global cruise lines in Dream Cruises, Crystal Cruises and Star Cruises, a shipbuilding operation in Germany and is a joint venture partner in Philippines IR Resorts World Manila.

With most cruise ship operations suspended since the start of the COVID-19 pandemic, Genting HK recorded a net loss of US$742.6 million in 1H20 compared with a loss of US$56.5 million over the same period last year, and an EBITDA loss of US$204.1 million versus EBITDA of US$76.9 million in 1H19. The share of loss from Resorts World Manila, which has been closed to the public since 15 March, was US$37.4 million, while group-wide revenue fell 69.0% to US$226.2 million.

The company said its net debt position at 30 June 2020 was US$2.86 billion compared with US$2.14 billion on 31 December 2019.

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