The parent company of Crystal Cruises is in financial trouble
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
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:
- When will cruising resume? A line-by-line guide
- Why you shouldn’t expect bargain-basement cruise deals anytime soon
- How to cancel or postpone a cruise due to coronavirus
- Expecting a refund for a canceled cruise? Here’s how long it will take
- Some of the year’s hottest new ships could be delayed
- Stream these 13 movies, television shows to get your cruise ship fix
Featured image courtesy of Crystal Cruises
Sign-up Successful!
Welcome to The Points Guy!
Receive 1 Free Night Award every year after your Card account anniversary. Plus, earn an additional Free Night Award after you spend $60K in purchases on your Card in a calendar year. Awards can be used for one night (redemption level at or under 35,000 Marriott Bonvoy points) at hotels participating in the Marriott Bonvoy program.
- Limited Time Offer: Earn 125,000 Marriott Bonvoy Bonus Points after spending $5,000 in purchases on your new Card in your first 3 months of Card Membership. Offer expires 8/31/22.
- 6x points at hotels participating in the Marriott Bonvoy™ program.
- 4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
- 2x points on all other eligible purchases.
- Receive a 7% discount off standard rates for reservations of standard guest rooms at hotels that participate in the Marriott Bonvoy program when you book directly. Terms and Conditions Apply.
- Receive 1 Free Night Award every year after your Card renewal month. Plus, earn an additional Free Night Award after you spend $60K in purchases on your Card in a calendar year. Awards can be used for one night (redemption level at or under 35,000 Marriott Bonvoy points) at a participating hotel. Certain hotels have resort fees.
- Enjoy Complimentary Marriott Bonvoy Gold Elite Status with your Card.
- Terms apply.
- See Rates & Fees
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.
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.