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Genting HK splashes out $256m to buy three German shipyards

Nordic Yards' Wismar facility
Genting Hong Kong has entered a sale and purchase agreement to buy three shipyards in Germany, building on from its acquisition of Lloyd Werft Group in late 2015.

The purchase of Nordic Yards' three sites in Wismar, Warnemünde and Stralsund is made via three indirect wholly-owned subsidiaries of Genting HK, including Star Cruises Singapore Investment Holding (SCSI).

The sale and purchase agreement and land transfer agreement are valued at HKD1.99bn ($255.9m), Hong Kong-listed Genting HK announced today.

The Wismar yard offers a 340mtr long drydock and Warnemünde's drydock is 320mtr in length, enabling the construction of large cruise vessels at both. The Stralsund yard can build ships and superyachts up to 270mtr long.

Recent deliveries include icebreaking rescue and recovery vessels and offshore support vessels.

Genting said with the rapid growth of the global cruise market, especially in China, demand for cruise ship orders has reached an all-time high.

'As a consequence, the group faces the potential risk of being unable to obtain sufficient cruise shipbuilding slots at acceptable prices to implement its planned 10-year cruise ship fleet strategy for its three cruise brands: Crystal Cruises, Dream Cruises and Star Cruises,' Genting HK explained.

'In order to address this risk, it is strategic that the group acquires its own cruise shipbuilding yards to build its cruise fleet, freeing management to focus on design, planning and deployment of its planned fleet expansion,' the company said.

It added that businesses of Lloyd Werft Bremerhaven AG and Lloyd Investitions – und Verwaltungs GmbH (together the Lloyd Werft Group) have helped to deliver to the group the core competency to build quality cruise ships.

'This transaction directly complements and strengthens that existing capability by providing covered docks and fabrication facilities that will enable quality cruise ships to be built efficiently regardless of the weather,' Genting HK said.

The company believes that with the combination of the existing businesses of the Lloyd Werft Group, together with the assets and skills being acquired under this latest transaction, the group will be well placed to become one of the leading cruise and megayacht shipbuilders  in the world.