MV Werften files for insolvency

Worries about Genting-owned MV Werften grew acute Friday as employees were informed their December salaries will be paid only next week. Talks over the weekend about further subsidies to be granted by the German federal government and the Mecklenburg-Vorpommern federal state government did not produce a result.  

The trading of shares in Genting HK was suspended last Friday, January 7, pending the release of an announcement.

Subsidies row

On Sunday, Genting HK's deputy CEO, Colin Au (and one of MV Werften's managing directors) along with Managing Director Carsten J. Haake called on the federal government to agree to pay further subsidies.

In contrast, the federal government required Genting to make a contribution of €60m in order to pave the way for further subsidies.

According to different reports, Genting was willing to contribute between €30 and 41m, but was not prepared to fulfil the full €60m demand.  

Insolvency could make restructuring possible  

Insolvency – as defined in Germany's commercial legislation – does not necessarily mean the end of a company and the loss of all jobs. Rather, it aims to allow the company's survival and the start of a protected recapitalisation of operations.

As part of insolvency proceedings, employees receive payments for a maximum of three months from the German Federal Employment Agency (Bundesagentur für Arbeit).

It remains to be seen if an insolvency proceeding can help MV Werften to restart on a better footing. Ideas about opportunities beyond cruise ship building have been circulating in the past days. Among others, Nordic Yards expressed interest to extend its activities in the region involving the  production of components for offshore wind farms and of ship repair.

This opportunity may be particularly relevant for the Stralsund yard.

Global Dream

MV Werften is still to complete 208,000gt Global Dream for Dream Cruises.

See also 'Genting-owned Lloyd Werft also files for insolvency'