Genting Hong Kong Becomes Asia’s Biggest Pandemic Tourism Casualty
Cruise line operator Genting Hong Kong (HK:0678) and (GTHKF) is entering liquidation and has filed for the winding up of the company. With its “cruises to nowhere” suspended, the company is unable to ward off the creditors.
It’s the largest pandemic-provoked collapse of a tourism business in Asia – so far. The company’s downfall was confirmed when its German shipbuilding business slipped into insolvency last week, triggering cross-defaults for a Genting Hong Kong group that was already ailing.
But most damaging of all, the cruise company has been unable to run its trips. Hong Kong suspended cruises in February 2020 in the early days of the Covid-19 outbreak. Genting finally got guests back on board at the end of July 2021, on “seacations” that did a round trip in and out of Hong Kong, without stops. Even those have been forced to halt once again as of January 7, due to Hong Kong’s handful of Omicron cases.
The Hong Kong company says it will run out of cash by the end of this month. It once owned the U.S. cruise liner Norwegian Cruise Line (NCLH) , which made it the world’s third-largest cruise line operator, with 42,000 “lower berths” (the normal kind, rather than bunk beds) across a fleet of 20 ships.
Genting Hong Kong, the cruise arm of Malaysian gambling empire Genting and the tycoon Lim Kok Thay, filed notice of its liquidation to the Hong Kong Stock Exchange on Wednesday. Its shares were suspended on Tuesday, and trading remains halted until further notice.
The stock has sunk into penny share status, at just HK$0.42 per share, and surrendered all the rapid gains it made in November. An easing of its cash crunch with the resumption of some kind of sailing saw the shares double from HK$0.57 at the start of October to a peak of HK$1.14 on November 22, only to crash again.
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