The recent collapse of MV Werften, the shipbuilding unit of Genting Hong Kong that itself filed for provisional liquidation, has sent shock waves outside Germany where the yards are located.
A total of 16 Finnish companies had contracts worth more than €500 million to supply equipment and services to the two 208,000 gross ton Global class ships Genting Hong Kong intended to build at MV Werften.
However, the second ship was axed when problems started to emerge at the yard, said Jussi Haarasilta, EVP Large Corporates at Finnvera plc, the state owned company that provides export credits.
“The claims of creditors will become clear as part of the process. Finnvera had originally committed itself to guarantee contracts for a total amount of €365 million for the two ships, so Finnvera has not reached the ceiling in liabilities in full as yet,” he told CruiseBusiness.com
“We assess credit risks in the same way as commercial bank. The Covid-19 pandemic has hit the cruise industry and hampered its operations,” Haarasilta continued.
“The creditors will assess various options as the process evolves. A central role in this will be held by the biggest creditors, such as the German government,” he concluded.
The total value of the contract for the two Global class ships was €3.1 billion and the German KfW Ibex bank had set up a financing package worth €2.6 billion, Finnvera said in a statement, noting that its €365 million formed part of this.
Finnvera added that Finnish companies had been contracted to supply design services, equipment sand other products and services to the Global class ships. However, Finnvera did not name the companies involved.
Finnvera said that it is a growing trend that an export credit institution or other similar kind of company provide funding for a buyer, but it is often a precondition of the funding that related purchases are made from the home country of the expert credit provider.
Cruise ferry owner’s collapse introduced Genting Hong Kong to cruising
Genting Hong Kong entered the cruise industry in 1993, when Rederi AB Slite, a Swedish cruise ferry company, filed for bankruptcy. It acquired two cruise ferries, Athena and Kalypso, both of about 40,000 gross tons and built in Finland in 1989 and 1990, respectively. They were introduced in the Far East under different names under the Star Cruises brand name.
Several second hand acquisitions for Star Cruises were followed by two newbuildings in the late 1990s and in 2000, Genting Hong Kong acquired Norwegian Cruise Line.
Genting Hong Kong gradually exited Norwegian between 2013 and 2018 and the funds it received allowed it to acquire Crystal Cruises, the Los Angeles based luxury cruise operator and start expansion of its Asian activities.
As slots were difficult to secure at leading cruise ship yards, Genting Hong Kong decided to take shipbuilding in-house and it acquired a number of yards in Germany that were rebranded as MV Werften.
