Genting Hong Kong has boosted its stake in Dream Cruises as part of a US$307 million deal aimed at keeping the global cruise ship operator afloat.
The three-way transaction sees Genting Hong Kong’s wholly-owned subsidiary, Ocean World, acquire 207.2 new Subscription Shares in Dream Cruises for a consideration of US$247.9 million, while an entity named Darting Investment Holdings Ltd has acquired 49.3 Subscription Shares for US$59 million. Darting had previously acquired a 32.58% stake in Dream Cruises from Ocean World via a series of transactions in 2019 and 2020.
The issue of new shares will see Ocean World’s interest in Dream Cruises increase from 67.42% to 69.97% while Darting’s will fall from 32.58% to 30.03%.
In a filing, Genting Hong Kong said the subscriptions would provide additional liquidity to the Dream Group, which has debts of US$300 million, to help meet its upcoming financial obligations and prepare for the targeted resumption of its Genting Dream vessel in July, “thereby bringing 100% of the Dream Cruises fleet/capacity into operation.”
Dream Cruises operates three cruise ships – Genting Dream, World Dream and Explorer Dream – and is currently building two more ships, Global Dream and Global II, at Genting Hong Kong’s MV Werften shipyards in Germany.
Genting Hong Kong’s injection of funds comes at a time when it is facing financial troubles of its own, having recently announced a US$1.72 billion loss in 2020 and last August announcing it was temporarily suspending all payments to the group’s financial creditors in order to preserve liquidity as the COVID-19 pandemic grounded its global cruise ship fleet.
However, the company said earlier this month that it has reasonable grounds to believe that a restructuring can be “successfully consummated” given the progress of discussions with its lenders.