The parent company of Crystal Cruises is in financial trouble

Aug 20, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

The parent company of Crystal Cruises, one of the world’s best-known luxury lines, is in financial trouble.

Hong Kong-based Genting Hong Kong late Wednesday said it had stopped making payments to creditors as it contended with a sharp loss of revenue due to the coronavirus crisis.

The announcement came two days after the company missed a 3.7 million euro payment of fees related to the construction of certain ships.

For more cruise news, reviews and tips, sign up for TPG’s new cruise newsletter

The payment was due from subsidiaries of the company related to new vessels, and the failure to pay the fees puts the subsidiaries into default, the company said.

The company said it hoped to negotiate a restructuring of its debt with creditors. The company owed creditors nearly $3.4 billion as of July 31.

“The company’s remaining available cash will be reserved to maintain critical services for the group’s operations, while the company will endeavor to negotiate a holistic debt restructuring solution,” Genting Hong Kong said in a statement late Wednesday to the Hong Kong stock exchange.

The company did not say how much cash it still had available.

Related: How to book a cruise with points and miles 

The 980-passenger Crystal Serenity will visit the Maldives in 2022 as part of an around-the-world voyage from Miami. (Photo courtesy of Crystal Cruises)
Genting Hong Kong is the parent company of Crystal Cruises, which operates some of the world’s best-known luxury ships. Here, the 980-passenger Crystal Serenity. (Photo courtesy of Crystal Cruises)

Genting Hong Kong is the parent company of Crystal Cruises as well as two Asia-based cruise lines: Dream Cruises and Star Cruises. It also owns the Werften shipyard in Germany, where the first expedition ship for Crystal Cruises currently is under construction. In addition, it’s a joint venture partner in Resorts World Manila in the Philippines.

In its statement, the company warned that its suspension of payments to creditors would likely result in the company being considered in default of multiple debt obligations.

“Such events of default would give rise to a right for requisite creditors of the group to declare that the financial indebtedness owed to them are immediately due and payable,” the company noted.

The company said it planned to call a meeting of creditors to discuss restructuring and refinancing options. It said it would ask creditors “to refrain from taking any enforcement action so that the stakeholders of the group can have a stable platform to negotiate and implement the restructuring.”

Related: Coronavirus crisis claims another small cruise line 

In its statement, the company said it had been trying to raise more money, but “there is currently a lack of certainty as to the outcome of the fundraising exercise.”

Analysts in Asia suggested Genting Hong Kong may try to sell assets, and a liquidation of the entire company was not out of the question.

“The financial stress may push the owner to sell the asset, or liquidate the entire firm,” CEB International Investment Corp. head of research Banny Lam told Bloomberg overnight.

Lam added that a liquidation of the company was not very likely.

Genting Hong Kong shares plunged nearly 38% in Thursday trading on the Hong Kong Stock Exchange. They closed at just 30 Hong Kong cents — about 4 U.S. cents.

Crystal recently canceled all sailings through early January 2021. The line hasn’t operated cruise departures since March, nor has Genting Hong Kong’s Star Cruises division. The company’s Dream Cruises brand has recently resumed short sailings out of Taiwan with a single vessel, the 1,856-passenger Explorer Dream. The voyages only are open to Taiwanese travelers.

Genting Hong Kong is majority owned by Malaysian tycoon Tan Sri Lim Kok Thay.

Genting Hong Kong is a separate company to Genting Berhad, which owns Resorts World Las Vegas and other Resorts World properties in the U.S., Malaysia, Singapore, the UK and the Bahamas. But the two companies are tied together by Lim, who owns a controlling stake in both of them.

Lim is the chairman of both companies.

Additional resources for cruisers during the coronavirus outbreak:

Featured image courtesy of Crystal Cruises 

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
15.74%-24.74% Variable
Annual Fee
$250
Balance Transfer Fee
N/A
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.