Genting Hong Kong’s Dream Cruises applies to wind up firm

SINGAPORE — Cruise operator Dream Cruises has filed a court petition to be wound up, days after its beleaguered parent company, Genting Hong Kong, said that its own filing for bankruptcy will not affect the cruise line's operations.

Dream Cruises has three ships in its fleet that operate out of Hong Kong, Singapore and Taiwan. It is also one of the operators running cruises-to-nowhere in Singapore. 

The impact on operations in Singapore is not clear at the moment. Singapore Tourism Board said in response to TODAY's queries on Thursday (Feb 3) that it was aware of this latest development.

"We are in contact with Dream Cruises and will continue to monitor the situation closely."

TODAY has sought comments from the cruise operator.

Genting Hong Kong, which owns Dream Cruises and Star Cruise, is unable to cover mounting debts and is now facing insolvency.

It applied for joint provisional liquidators but in a statement issued to the Hong Stock Exchange last Friday (Jan 28), it said that this application “has triggered further insolvency events of default or termination events under all of the outstanding debt instruments of Dream Cruises Holding Limited”.

As a consequence, the board of Dream Cruises has filed a petition with the Bermuda Court on Jan 27 for the winding up of the company and the appointment of the same provisional liquidators now working with Genting Hong Kong.

Genting Hong Kong believes that a consensual restructuring will “present higher recoveries to all creditors and stakeholders compared to a value-destructive liquidation” of the business, the statement added.

“The Dream sub-group remains valuable, and there are transactions that can be pursued, which are likely to realise better value for the Dream sub-group’s creditors than a formal and terminal liquidation scenario,” Genting Hong Kong said.

The holding company added that it will make further announcements regarding any updates on the development of any restructuring proposal of the cruise line.

On Jan 19, Genting Hong Kong said that it had filed to wind up the company after failing to secure funding to pay its debts.

It warned earlier that it was facing potential cross-default amounting to US$2.78 billion (S$3.75 billion), following the insolvency of its German shipbuilding subsidiary.

The company said then that it had “exhausted all reasonable efforts" to negotiate with its creditors and stakeholders.

However, despite its financial woes, Genting Hong Kong also said on Jan 19 that it would continue operating Dream Cruises to “preserve and protect the core assets and maintain the value of the Group".

Genting Hong Kong, which is part of Malaysia's Genting Group, reported last May a net loss of US$1.7 billion in 2020 due to travel restrictions brought about by the Covid-19 pandemic.