08 Jan 2022 // 4 minute read
Text by Cruise & Harbour News | Photos by MV Werften & Genting Hong Kong
Currently Building a 9,000-Passenger Ship, MV Werften Could Be In The Brink Of Insolvency
According to a report that surfaced today, the MV Werften shipyards, Genting Hong Kong's German shipbuilders, are reportedly nearing the brink of insolvency due to finding itself on stalled negotiations with the German federal and state government, which had promised financial assistance. Genting Hong Kong has officially requested a suspension in trading of it's stock pending an announcement, with the shipyard management having informed employees that it would not be making December wage payments, which were scheduled for today. In meetings with labor unions, MV Werften stressed that the company still had significant cash balances but that due to loan covenants, it was forced to postpone the wage payments until next week, at least. A spokesperson for the German unions at the shipyard told the german media they believe the future hangs in the balance with financial talks beeing complicated by politics. Currently, MV Werften is responsible for employing 2,000 workers, 1,600 of them occupied with the building of Global Dream.
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The shipyards' financial difficulties started back in the Summer of 2020, naturally, as the operations were suspended. Genting Hong Kong managed to recapitalize, based on loan guarantees from the state government where the shipyard is located, aswell as a federal government fund, the Economic Stabilization Fund, which helped complete the construction of the brand-new Crystal Endeavor. A year later, in June 2021, Genting had reported that it had reached agreements with Germany for the financial support to run the shipyard and complete the construction of the aforementioned Global Dream cruise ship. But, last month, and in danger of breaching it's minimum liquidity covenant, the shipyards seeked another 88 million from a backstop loan, provided by the State of Mecklenburg Vorpommern. The state informed the shpiyard's owners that it did not believe the company had met the conditions required to access the loan, despite Genting saying otherwise. Now, speculation has arisen in Germany that MV Werften could be in the brink of declaring insolvency. The MV Werften shipyards are thus currently building the Global Dream, the first Global class cruise ship, with a capacity for over 9,000 passengers whilst on maximum capacity, according to Genting Cruise Lines' original announcement. At 342 meters long and 208,000 GRT, the Global Dream will become one of the world's largest cruise ships, when launched. Genting Hong Kong is the parent company for Crystal Cruises, which resumed operations in July 2021, as well as Dream Cruises, which holds two Breakaway-class cruise ships and the Explorer Dream.
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