The sale of some of Genting Group global assets, including shipyards and cruise ships, could become a reality after the company announced appointment of joint provisional liquidators by a Bermuda court.
The troubled company controlled by Malaysian tycoon Lim Kok Thay, which owns three cruise lines including the luxury brand Crystal Cruises, and the two cruise operators dominating the Asian market (Dream Cruises and Star Cruises), as well as the MV-Werften shipyards in Germany, will see restructuring plan in respect of the US$2.8 billion debt.
Several German media outlets reported that the MV-Werften shipyard has taken steps as insolvency administrators are appointed to work on restructuring plan after Genting reported that Lim Kok Thay resigned as chairman and CEO effective Friday.
Two years after the outbreak of the pandemic, which hit the cruise industry hard, the restructuring of Genting Hong Kong is a setback for MV Werften as the shipyard filed for bankruptcy on January 10th. MV Werften was in the final stage of completing the cruise ship Global Dream, the first of the two units ordered for Dream Cruises and Star Cruises. With a price tag of 1,3 billion euros, Genting announced that Global Dream will be one of the world’s largest cruise ship by passenger capacity with a staggering 9.500 guests plus 2200 crew. Just in comparison the world’s largest cruise ship Wonder of the Seas which is 362 meters in length (Global Dream is 342 meters in length) has a maximum capacity of 6988 guests and 2394 crew.
The ship Global Dream is under construction in Wismar for Dream Cruises and is 75 percent completed, however, the future of the cruise ship is uncertain. According to the insolvency administrator at MV-Werften - Christoph Morgen, several companies have expressed interest in the Global Dream and the shipyard has signed confidentiality agreements with them.
"Without more detailed information, I can't assess the process. But it's not a good sign. We're in the process of getting in touch with Genting's representatives to understand how this is will affect Genting's proceedings, particularly with regard to the future of Dream Cruises. Regarding Global Dream, we have been contacted by several serious interested parties and have already concluded non-disclosure agreements. The interested parties will now get a detailed picture of the shipbuilding process." said Christoph Morgen.
For a ship this size, only the big players in the cruise industry could be interested including Norwegian Cruise Line Holdings, Royal Caribbean Group, MSC Cruises, and Carnival Corporation. The question is which of the four big players with over 90% share of the global cruise market will show interest in the Global Dream. The ship is custom-built for Dream Cruises designed specifically for the Chinese cruise market. Therefore interested parties will have to deploy the vessel in Asia, or spend more cash in order to adapt the vessel to the western cruise market.
Norwegian Cruise Line Holdings
Back in 2017 Norwegian Cruise Line Holdings made a significant investment in China when it built the NCL’s Norwegian Joy specifically designed for that market. Two years later the Norwegian Cruise Line has moved Its built-for-China Ship to the U.S. sending it to Alaska following a $50 million renovation. Therefore NCL might not be interested in buying the Global Dream. At this moment Norwegian Cruise Line main focus is the construction of its six Prima-class ships which will eventually join the cruise line by 2027.
MSC Cruises
MSC Cruises has been quite aggressive in the cruise market for the past decade with a record number of newbuilt cruise ships joining the fleet each year. The company might be interested in purchasing the cruise ship from MV-Werften considering the fact that they already acquired a cruise ship under construction in the past. Back in 2012, the company has purchased the cruise ship Phoenicia, which needed to be the first giant cruise ship owned by an Arab company after construction came to a halt. The ship was originally built for the Lybian state-owned company headed by Hannibal Gaddafi, Colonel Gaddafi's fourth son. After the regime was overthrown the project was abandoned and MSC Cruises purchased the ship from STX Shipyard and renamed it MSC Preziosa.
Carnival Corporation
Carnival Corporation has a strong presence in the Asian market with its brand Costa Asia as well as ships from other brands owned by the company. The world's largest cruise corporation will deploy some of the new build ships already constructed for Costa Asia once the situation with the pandemic settles down. However considering the current situation at the moment in the Asian market it is unlikely that Carnival Corp. will have an interest in purchasing the Global Dream.
Royal Caribbean Group
Royal Caribbean Group has also a strong presence in the Asian Market with two RCI ships currently deployed in Hong Kong and Singapore. The new Global Dream ship simply doesn’t fit in the Royal Caribbean International or Celebrity Cruises fleet.
