This builds on the liquidity boost from new share subscriptions in Dream Cruises by investment group Darting and Ocean World, a Genting HK subsidiary. Darting paid $59m cash for its shares, while Ocean World offset nearly $248m in intercompany loans.
The approved restructuring terms are only slightly different what was reported here in early May.
Included is a new €240m subordinated secured loan facility. And a €60m silent participation takes effect via provision of a limited-recourse equity stake to the lender in exchange for contributing funding, together with €300m in new funding from Germany's Economic Stabilization Fund (WSF) for MV Werften and/or subsidiaries to fund the completion of Crystal Endeavor, delivered June 26, and Global Dream, now due in 2022.
This WSF funding is guaranteed by Genting HK and wholly owned subsidiaries of MV Werften and secured by a composite security and guarantee package.
A new committed €313.6m post-delivery financing facility for Crystal Endeavor on substantially standard market terms will be provided by certain existing lenders. This facility is guaranteed by the company and an indirect, wholly owned subsidiary.
The restructuring amends terms for $981.05m of debt to include a material extension of the facilities' maturity until no earlier than July 31, 2026, and the reduction and harmonization of interest margins for up to 24 months.
Amortization payment requirements for nearly $1.5bn of separate secured financing arrangements entered into by Dream Cruises, Crystal Cruises and Star Cruises are suspended until the earlier of June 29, 2023, or 24 months from the restructuring effective date, along with consequential adjustments to each affected amortization schedule.
All guarantees and security under existing financing arrangements will be retained, along with the implementation of limited credit enhancement arrangements including granting of new security and assignment of rights.
Financial covenant testing will be suspended under existing financing arrangements until 24 months after the restructuring, other than a minimum liquidity covenant, which will be reset to an appropriate level. Existing financial covenants will be reset until 24 months after the restructuring to reflect appropriate ratios for the purpose of facilitating a fully funded business plan aligned with anticipated market recovery.
$148m backstop funding
In addition, backstop funding will be provided to address potential future liquidity needs. This will include the pursuit of at least $30m in equity financing and conditional, committed standby loan facilities of $118m provided by Mecklenburg Vorpommern state and the WSF, to be secured by second and third ranking mortgages of Dream Cruises' 2017-built World Dream.
The backstop instruments may be drawn down to meet debt service obligations to avoid breaching the minimum liquidity covenant. And they will terminate when the company and/or its subsidiaries deposit at least $148m into a restricted account or the group maintains compliance with certain financial covenants.
Hit hard by the pandemic, Genting HK last August asked creditors to form a steering committee for a restructuring. At Dec. 31, the group's liabilities exceeded assets by $3.26bn.
Genting HK reported a 2020 net loss of US$1.7bn.