At the same date, total borrowings amounted to $3.38bn, capital commitment was $1.16bn and cash and cash equivalents (excluding bank overdrafts) were $242.8m.
Hit hard by the COVID-19 pandemic which suspended most ship operations and temporarily shuttered its shipyards, Genting HK has been engaged in restructuring efforts since last August.
The group obtained a debt holiday for 2020 borrowings that amounted to $151.4m originally due and payable by the end of 2020. Without further extension, these borrowings are to be paid from April.
Restructuring negotiations progressing
At year's end, Genting HK was in default for principal on borrowings totaling $3.39bn. This week, the group received a letter from major creditors for $1.74bn of that, acknowledging significant progress in the restructuring negotiations and that credit approval processes were under way to be able to enter into binding terms.
The creditors confirmed their intention to stand still from exercising any enforcement or other rights available to them under the default until the restructuring's completion or June 30, whichever is earlier.
Ad hoc group
An ad hoc group of these major creditors and Genting HK advisors continues to work on a restructuring plan. This includes obtaining an extended debt holiday for borrowings up to two years after the restructuring effective date in addition to the existing approved debt holiday and obtaining waivers from compliance with bank covenants through this period.
The plan also seeks approval for interest step down for some borrowings, and to convert the company's existing letter of credit facility into a term loan to finance working capital requirements. As well, the plan would formalize the forbearance from enforcement currently observed by creditors in relation to events of default.
In other actions, Genting HK applied for further debt holiday and waivers for past defaults for the Genting Dream sale and leaseback arrangement and borrowings from other financial creditors not represented in the ad hoc group, collectively amounting to $916.8m. The debt holiday for Genting Dream was extended to October this year, and Genting HK sees 'reasonable' prospects for obtaining a further delay, along with further debt holidays from other creditors not represented in the ad hoc group when the overall restructuring is completed.
Seeking fresh equity
Genting HK said it is in the process of securing a fresh equity injection of approximately $50m to $100m from an existing business partner or other investors.
Pursuing another bridge loan from Germany
Further, the company is seeking a medium-term bridge loan of up to €300m from Germany's Economic Stabilization Fund (WSF), a COVID-19 support program. Genting HK already received a short-term WSF bridge loan of €193m in October, which enabled MV Werften to reopen.
The additional medium-term loan would finance the shipyard operations and the completion of Global Dream. Upon the completion of that ship, now scheduled for mid-2022, further liquidity will be released from the existing post-delivery financing to repay the WSF loan.
The approval of the WSF medium-term bridge loan is conditional on the outcome of the ad hoc group restructuring solution.
Crystal Endeavor financing
Upon completion of Crystal Endeavor, Genting HK expects to obtain additional secured financing of up to €280m from other lenders to repay the WSF short-term bridge loan. Crystal Endeavor is targeted to be completed by May.
Resumption of cruise operations
The resumption of cruise operations in Taiwan with Explorer Dream since July last year, followed by World Dream in Singapore since November, have made positive contributions that have reduced Dream Cruises' burn rate and improved cash flows. Genting Dream is targeted to start cruising in July.
After a gradual restart as travel restrictions are lifted and vaccination plans are widely carried out by the authorities, Genting HK expects cruise operations will normalize and achieve pre-pandemic level in 2022.
Deferred capital commitments
Genting HK also has certain contractual financial obligations and various capital expenditures to settle, most related to newbuilds. Earlier, the group deferred the construction of Global 2 and suspended the construction of Endeavor 2 and the Universal class ships.
Management is currently finalizing the timing of the shipbuilding plans, and the viability of projects are subject to the WSF financial support.
Based on discussions with suppliers and contractors, Genting HK expects it will be able to defer the capital commitments of Global 2, and the suppliers and contractors have not taken actions to enforce the fulfilment of commitments by the shipyards.
The company said it will revisit its plan when the cruise industry has fully recovered from the COVID-19 outbreak. Meanwhile, Genting HK is 'confident' the capital commitments due and payable within the next 12 months will be substantially reduced.
Selling non-core assets
Should measures not work out, Genting HK is prepared to monetize some non-core assets which will provide additional liquidity. The company disposed of its investment in Macau in December for a consideration of $96.2m.
Cash flow projection
All told, Genting HK's directors believe there is a 'reasonable' prospect the group will have sufficient cash flows to meet operating requirements, investing activities and financial obligations for at least 12 months, though cautioning this depends on the successful outcomes of various initiatives.