Gambling group Genting: MV Werften’s bankruptcy: Casino billionaire Lim Kok Thay gambled away
Bangkok The Genting group of the Malaysian billionaire Lim Kok Thay is at the center of the bankruptcy debacle surrounding the German MV Werften. However, the 70-year-old does not want to let himself sit on the fact that he should be the culprit for the misery. “The counterparties have not met their contractual obligations,” wrote the head of the travel and gaming conglomerate on Tuesday in a Notice to the Hong Kong Stock Exchange.
He means, among other things, a 78 million euro emergency loan to which he is entitled in his opinion. The state of Mecklenburg-Western Pomerania, from which the money is supposed to come, sees things differently. In any case, the result is clear: There was an “immediate and considerable liquidity gap”, Lim admits to his investors.
The entrepreneur from Southeast Asia, whose fortune the magazine “Forbes” estimates at 2.6 billion dollars, tries to sow doubts about the representation of the federal government him as the sole person responsible for the bankruptcy of the company presented: “As the federal government, we have pulled out all the stops to avoid the bankruptcy of MV Werften,” said Economics Minister Robert Habeck (Greens). “However, the owners have turned down our offer of help.”
According to this, Genting should provide 60 million euros of its own funds for further funds amounting to 600 million euros from the state economic stabilization fund. However, the company claims that it will not be able to raise the amount.
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The failed negotiations now have serious consequences for the empire of the family entrepreneur Lim, who took over the management of the group from his father almost 20 years ago. The bankruptcy of MV Werften, which Lim bought in 2016, led to agreements with creditors that claims of up to 2.8 billion dollars could be made due, it said in its announcement.
Obviously, there is not much to be gained from the company: they “still have no access to significant new sources of liquidity,” it said. The affected part of his corporate empire, Genting Hong Kong, is now in talks with banks, business partners and consultants to weigh up the options.
Record loss of $ 1.7 billion
Lim has bundled its cruise business in Genting Hong Kong – the owner of MV Werften and the now insolvent Lloyd-Werft in Bremerhaven. The group started it three decades ago with the Asian market-focused provider Star Cruises in order to expand its sources of income, which until then had been concentrated on hotels and casinos.
The US cruise company Crystal Cruises and the Dream Cruises brand now also belong to the company. This was originally supposed to put the giant ship “Global Dream” into operation as early as 2021, which is currently being built at MV Werften. However, there were delays in the course of the corona pandemic.
However, just six months after the start of the pandemic, the company’s problems went well beyond Mecklenburg-Western Pomerania: Waves of infection brought the cruise business to a standstill around the globe, and travel restrictions were particularly strict in Genting’s core Asian market.
In August 2020, the Lim-led company announced that it would no longer service debts totaling $ 3.4 billion in order to preserve liquidity. The annual loss was a record $ 1.7 billion.
The company continued to lose money last year: Genting Hong Kong reported a loss of $ 283 million for the first half of 2021. How things will go on with Lims Cruises is completely open. The company’s shares have been suspended from trading on the stock exchange since Friday.
For Lim, whose conglomerate is active from the USA via Great Britain to Singapore, it is also about preserving his father’s legacy: Lim Goh Tong, who was born in China, emigrated to Malaysia in 1937 at the age of 19, where he worked with machines acted and later entered the construction industry. In the 1960s, he came up with the idea of expanding into the tourism business after visiting the Malaysian mountainous region of Cameron Highlands for a recreational excursion.
His calculation: With increasing prosperity in the tropical country, the demand for pleasantly cool mountain air would increase. Because the Cameron Highlands were too remote for him, Lim Senior looked instead for high-altitude building land near the capital – and found it on a 1,865-meter-high summit 60 kilometers northeast of Kuala Lumpur. “We struggled through dense jungle and crossed numerous streams and rivers before we reached the summit,” he wrote in his autobiography.
Billions bet on Las Vegas
Work on the facility, known as Genting Highlands, took six years and was granted a casino license from the start. The resort formed the cornerstone of the global corporation that Lim Goh Tong led up to four years before his death in 2007 at the age of 89.
He focused on diversification early on: in the 1980s, he got into the palm oil plantation business that Genting still operates today. The company now also includes power plants, oil and gas production systems and a biotechnology division.
The core of the Genting Group, however, remained the travel and gaming business with casinos in Singapore, Manila and London. The cruise ship “Global Dream” was also intended to become a floating amusement arcade for wealthy Chinese.
Lim recently ventured a billion-dollar bet that this segment would help his group through the deep crisis: For 4.3 billion dollars, he built a new large casino with 3,500 hotel rooms in the US gambling metropolis Las Vegas, which he opened last summer. At the time he was “extremely confident” that the project would be successful: “There is a lot of demand because people have stayed at home for so long and now have the confidence to spend money again.”
The sums that Lim is currently dealing with in Germany seem comparatively meager: The dispute over the 78 million euro payment that Genting wants to obtain from the state of Mecklenburg-Western Pomerania came to court on Tuesday in Schwerin. A decision in the proceedings is to be announced next Monday.
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