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German court rules against loan payment to Genting Hong Kong

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A German court ruled Mecklenburg-Vorpommern state doesn't have to pay Genting Hong Kong a backstop loan of €78m.

Genting HK, which took the state to court, has warned it may not be able to meet financial obligations without those funds. Already last week both Genting-owned MV Werften and Lloyd Werft Bremerhaven filed for insolvency.  

Shortfall had not been expected until around 2024

Genting HK had demanded payment based on an agreement signed last June as part of its $2.6bn restructuring. In this agreement, Mecklenburg-Vorpommern was to provide the loan in case of financial distress. At the time, it was expected a liquidity gap could arise around 2024, yet Genting already in December said the money was needed, citing the pandemic's continued impact on business.

Schwerin District Court did not agree Genting is in a distress situation without the loan.

Entitled to appeal

The cruise operator is entitled to appeal today's decision. Genting HK hasn't issued a statement yet. 

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