Last week, Peninsula Petroleum Far East filed a lawsuit in Miami citing ‘Crystal Symphony’, Crystal Cruises and Star Cruises for allegedly not paying fuel bills.
In the light of parent company Genting’s financial problems, Crystal Cruises announced a suspension of operations through April for its oceangoing cruise ships and through May for its river operations.
“This was an extremely difficult decision but a prudent one given the current business environment and recent developments with our parent company, Genting Hong Kong,” said Jack Anderson, Crystal’s President last week.
“Crystal has been synonymous with luxury cruising for more than 30 years and we look forward to welcoming back our valued guests when we resume operations. We wish to thank our guests and travel advisors for their incredible support during these ongoing challenging times.”
It was alleged that unpaid fuel bill go back to late 2021. The filing also alleged that Star Cruises had not paid some of its fuel bills since 2017.
Total claims lodged were $1.2 mill against the ‘Crystal Symphony’, $2.1 mill against Crystal Cruises and $1.3 mill against Star Cruises.
On Thursday of last week, US District Judge, Darrin Gayles ordered that a warrant be issued for the arrest of the ship.
She was due to arrive in Miami last weekend but instead terminated her cruise at Bimini, in the Bahamas.
Global Maritime Security was appointed to oversee the arrest of the vessel.
The problems stem from a 18th January, 2022, filing of a petition by Genting Hong Kong at Bermuda’s Supreme Court to wind up the company in view of its ongoing financial situation.
Genting told the Court that they wished to appoint Edward Middleton and Ms Wing Sze Tiffany Wong both of Alvarez & Marsal Asia, Hong Kong and Edward Niles Whittaker of R&H Services of Bermuda, as joint provisional liquidators (JPLs) to develop and propose restructuring efforts with regard to the company’s debts and liabilities.
The company asked the Bermuda Court to authorise the JPLs to, among other things, facilitate, and assist it in developing and proposing, a restructuring of the Group’s financial debt to allow it to continue as a going concern, by agreeing a compromise or arrangement with the company’s creditors, or be authorised to dispose of all or some of its assets to maximising value and returns for the company’s creditors.
Genting said in the filing that it believed that the appointment of the JPLs was essential and in the interests of the company, its shareholders and its creditors in order to maximise the chance of a financial restructuring, to provide a moratorium on claims by any of its unsecured creditors and to seek to avoid the company’s disorderly liquidation.
Certain of Genting’s business activities, including the operations of the cruise ships by Dream Cruises Holding, will continue in order to preserve and protect the core assets and maintain the value of the Group.
Genting claimed that it had exhausted all reasonable efforts to negotiate with the relevant counterparties under its financing arrangements.
As the company and the Group have no access to any further liquidity under any of its debt documents, the company’s available cash balances were expected to run out on or around the end of January, 2022 according to its cash flow forecasts, it said.
This was as a result of (a) ongoing operational expenditure; and (b) potentially required payments of certain liabilities that are expected to be made on or before that date. The Board considered that the company will imminently be unable to pay its debts as they fall due.
Earlier, its German shipbuilding and repair interests, MV Werften and Lloyd-Werft had declared themselves insolvent. As a result, Genting had warned investors that cross defaults totalling $2.78 bill may follow.
Genting also claimed that a German Court had rejected an application to provide MV Werften with access to $88 mill.
At the time that ICSI News went to press, Dream Cruises was still operating but the bookings facility had been withdrawn, while Star Cruises was embarking in its last cruise.
It was later announced that Tan Sri Lim Kok Thay had resigned as Chairman, CEO and Executive Director of the company and accordingly, had also ceased to be members of the remuneration committee and the nomination committee.
In addition, Au Fook Yew (Colin Au) resigned as Deputy CEO, Group President and Executive Director.
Both resignations came into effect on 21st January, 2022.
Genting Hong Kong had earlier confirmed that Alan Smith, Ambrose Lam Wai Hon and Justin Tan had resigned as independent non-executive directors.