Crystal Cruises parent company faces liquidation as cash runs out

The parent company of Crystal Cruises is out of cash and soon could shut down a significant part of its worldwide operations.

Genting Hong Kong on Wednesday said it had filed what is known as a winding-up petition with a court in Bermuda to appoint provisional liquidators who can sell off or shut down parts of its business as part of an orderly restructuring.

In a filing with the Hong Kong stock exchange, where its stock is traded, the Hong Kong-based cruise operator said it had no access to any further liquidity and expected to run out of cash around the end of January.

The company, which owns Asia-based Dream Cruises and Star Cruises as well as Crystal, has been struggling financially ever since the COVID-19 pandemic forced a worldwide shutdown to cruising in early 2020.

In the filing with the Hong Kong stock exchange, Genting Hong Kong said some of its business activities including "but not limited to" the operations of Dream Cruises would continue as its liquidators pursue a financial restructuring "in order to preserve and protect the core assets and maintain the value" of these assets during the process.

But it said it expected the majority of its existing operations to "cease to operate."

The filing did not mention the fate of Crystal specifically.

A spokesperson for Crystal on Wednesday did not immediately respond to a request for more information about the status of the line.

As of Wednesday morning, Crystal vessels continue to operate. At press time, the line's two main oceangoing ships, Crystal Serenity and Crystal Symphony, were visiting the Mexican port of Progreso and the British Virgin Islands port of Tortola, respectively. The line's new expedition ship, Crystal Endeavor, was sailing in Antarctica. Crystal also operates five river ships in Europe that don't normally sail at this time of year.

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The appointment of liquidators for Genting Hong Kong does not necessarily mean that lines it operates will shut down.

In its filing with the Hong Kong stock exchange, the company said it was seeking an order from the Bermuda court that will oversee the liquidation process to authorize its liquidators to "assist the company in developing and proposing a restructuring of the [company's] financial indebtedness in a manner designed to allow the company to continue as a going concern."

Genting Hong Kong also asked the court to authorize its liquidators to "dispose of all or certain of the company's assets with a view to maximizing value and returns for creditors."

Genting Hong Kong said the liquidators would "seek to avoid a disorderly liquidation of the company."

In addition to the three cruise lines, Genting Hong Kong owns two shipyards in Germany that have been building ships for its brands. Both of the shipyards filed for insolvency last week in German courts as Genting Hong Kong's financial situation worsened.

The company also owns Resorts World Manila.

Genting Hong Kong is part of a bigger parent company that also includes Genting Malaysia, which owns most of the Resorts World casino resorts around the world. The two companies are financially separated and trade separately. The liquidation of Genting Hong Kong will not affect Genting Malaysia or its holdings.

All of the Genting companies are controlled by Malaysia tycoon Lim Kok Thay.

While based in Hong Kong, Genting Hong Kong maintains a registered office in Bermuda, which allows it to file for liquidation there.

Genting Hong Kong is the most prominent cruise company to face insolvency over the past two years as the COVID-19 pandemic takes a heavy toll on the industry. But it's not the only one.

More than half a dozen mostly small cruise operators have shut down since early 2020, citing financial troubles related to the pandemic, including Spain-based Pullmantur and U.K.-based Cruise & Maritime Voyages.