Bankrupt Genting Hong Kong's Last Ship Ends Singapore Cruises
Six weeks after its parent company announced that it had filed bankruptcy, Dream Cruises announced that its cruise ship World Dream currently operating from Singapore will suspend service. The cruise ship, which was introduced in 2017, was operating short cruises to nowhere under a COVID-19 protocols agreement with the Singapore health authorities.
Dream Cruises was launched by Genting Hong Kong to be a premium cruise brand focusing on the Asian market. The company built two 150,000 gross ton cruise ships at Meyer Werft in Germany in 2016 and 2017 based on a similar design to cruise ships being built for Norwegian Cruise Line, which Genting Hong Kong was also an investor. The first of the ships, the Genting Dream, had recently been operating short cruises from Hong Kong but has been laid up since early February, while the World Dream continued to operate cruises from Singapore. A third cruise ship, the Explorer Dream, is idle in Taiwan.
Dream Cruises said that its liquidity is continuing to deteriorate and that it had been unable to secure additional external financing. The company also blamed its lack of operating income due to new reservations for the cruises having been suspended to give the provisional liquidators for Genting Hong Kong time to analyze the operations. Further, Dream pointed to occupancy restrictions imposed by the Singapore authorities due to COVID-19, which limited their passenger loads. The World Dream has 1,686 cabins with a normal passenger capacity of 3,376 (double occupancy).
The World Dream sailed from Singapore on its last short cruise on February 27 and will return as scheduled to Singapore on March 2. The company said, due to mounting pressure from creditors, it has decided to suspend operations. Genting Hong Kong’s other cruise lines had also faced creditor pressures, with a fuel supplier winning a court order to seize one of Miami-based Crystal Cruises’ ships for unpaid bills. Crystal suspended service and disembarked its passengers in the Bahamas in an attempt to avoid the seizure, but ultimately the banks that had financed the ships arranged for the courts in the Bahamas to arrest Crystal’s two cruise ships.
Dream Cruises had been among the first lines to resume service after the pause due to the pandemic with the World Dream operating from Singapore and the Explorer Dream in Taiwan. Reports indicate that the World Dream accounted for about 60 percent of the passengers that had cruises from Singapore in the past 15 months with the other cruises being operated by Royal Caribbean International. In addition to its cruise ship Quantum of the Seas, Royal Caribbean recently announced that it would reposition a second cruise ship from Hong Kong to Singapore starting in April 2022.
Genting Hong Kong had been facing mounting financial problems. In May 2021 the company reported financial losses of $1.7 billion related to its cruise ships, shipyard, and casino operations. By the end of the year, the company’s German shipyard operation MV Werften was running out of cash and when it was unable to agree with the German government on loans was forced to file for insolvency. The shipyard company is under the control of a liquidator who is working to sell the assets including a 208,000 gross ton cruise ship under construction for Dream Cruises.
Genting Hong Kong warned that the collapse of MV Werften was likely to trigger cross-defaults on its $2.78 billion in debt. The parent company filed a provisional “winding-up” statement with the courts in Bermuda where it is incorporated on January 18. They said the goal was to refinance and prevent a disorderly liquidation while they planned to continue Dream Cruises’ operations. At the end of January, Dream stopped accepting new reservations and then on February 4 also filed a petition for provisional liquidation.