Genting’s German shipyard unit files for insolvency

Written by Nick Blenkey
Global Class

MV Werften ran out of cash building 5,000 passenger global class ship

Running out of cash to continue construction of the 5,000-passenger cruise ship Global One, Genting Hong Kong’s German shipbuilding subsidiary MV Werften yesterday filed for insolvency under German bankruptcy laws.

The filing raises huge questions about the future of both MV Werften—which has shipyards in Wismar, Rostock and Stralsund—and Genting Hong Kong itself, whose operations include Dream Cruises, Crystal Cruises and Star Cruises, and the Resorts World Manila casino and resort in the Philippines.

Shares in Genting on the Hong Kong stock exchange remained suspended today. The MV Werften filing gives rise to an event of default under the Genting Group’s financing arrangements that may give creditors the right to demand payment some US$2.78 billion.

Genting is awaiting a decision by a German court on a case it has brought trying resurrect a $678 million state bailout that fell through when a requirement was added in for Genting to put up 10% of the money.

You can access Genting’s recent stock exchange filings on the situation here.


Meantime, something to be remembered is that insolvency under German law is very different from the protection from creditors provided by U.S. chapter 11 bankruptcy proceedings.

Interestingly, while VSM—the German Shipbuilding and Ocean Industries Association—is calling for the yards to be rescued, it is not calling for them to continue building cruise ships.

“From the point of view of the VSM, it is now crucial to enable the preservation of the four locations on the Baltic Sea and in Bremerhaven as part of a change of ownership,” the association says.

“The German shipbuilding industry can no longer afford further loss of substance on this scale. The maritime industry is facing a major upheaval. The entire fleet must be converted to climate neutrality, the production of renewable energy offshore must be massively expanded and the infrastructure for sustainable fuels and carbon capture and storage must be built. This will require extensive production capacities in the maritime industry in the coming years. Against this background, insolvency can also prove to be an opportunity, as the way is now clear for other market segments and business models.

“The VSM appeals to politicians to quickly create the conditions now so that the German economy can actively seize these opportunities.”

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