A German court has ruled against Genting Hong Kong as the cruise ship operator seeks access to US$88 million in funding from the state of Mecklenburg Vorpommern.
Industry Media Seatrade Cruise News reported overnight that the court finds that Mecklenburg Vorpommern has no obligation to provide the loan under an earlier agreement to support Genting Hong Kong’s German shipbuilding entity MV Werften Holdings Ltd (MVWH ).
MV Werften filed for insolvency last week, with Genting Hong Kong warning it could also trigger default events under various financing deals it entered into with creditors in 2021 relating to debts totaling nearly of $2.8 billion.
The company has not yet issued a statement on the court’s latest findings or its intention to appeal.
As previously reported by Inside the Asian Game, the global cruise ship giant has taken legal action after the German government’s export credit insurance agency, Euler Hermes, blocked the levy of US$88 million in mid-December in refusing to confirm insurance coverage.
Genting Hong Kong said in a filing last Thursday that “failure by relevant counterparties to meet their binding contractual obligations has created an immediate and significant shortfall in the group’s liquidity resources.”
According to reports overnight, the state of Mecklenburg Vorpommern had not anticipated that Genting Hong Kong would require the agreed financial support until 2024, as the court was not convinced that the immediate provision of the funding was necessary.
The company cited the impact of the COVID-19 pandemic on its operations with the US$88 million needed to complete construction of its new vessel, world dream.