Genting Hong Kong’s Shares Slump After German Unit’s Insolvency Filing

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By Yi Wei Wong
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Shares of cruise-ship operator Genting Hong Kong Ltd lost half their value on Thursday as the company resumed trading amid liquidity concerns after a German subsidiary went bankrupt.

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Genting Hong Kong shares, trading for the first time since January 7, fell 52% to HK$0.35 in afternoon trading, wiping away more than 3 billion Hong Kong dollars (US$385.1 million) from its market capitalization. If the share price holds up, it would be the largest one-day percentage loss in the company’s history.

The company said on Thursday it expected a legal decision next week in its ongoing efforts to gain access to a US$88 million drawdown facility backed by the German state government.

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Genting Hong Kong noted its “immediate and significant gap in the group’s liquidity reserves” and said pending the outcome of its case there is no guarantee that it will be able to meet its financial obligations.

The company reiterated that the bankruptcy filing of its German shipbuilding unit on Monday had triggered a cross default of nearly US$2.78 billion in debt. It said it has not received any demand for repayment from the creditors.

Genting Hong Kong has been hit hard by movement restrictions and a lack of travel during the COVID-19 pandemic. It reported a loss of US$238.3 million in the six months ended June 2021, and a loss of US$1.72 billion for fiscal 2020.

Write to Yi Wei Wong at [email protected]

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