Malaysian tycoon, Lim Kok Thay, has pledged most of his stake in beleaguered cruise operator Genting Hong Kong as collateral for loans, according to local media.
This move came after the company said that it had suspended all payments to creditors in a bid to maintain its critical services.
By last week, Genting Hong Kong’s stock had lost almost two-thirds of its value since December. Lim’s casino-to-hospitality conglomerate Genting Bhd and its subsidiaries suffered their first-ever group-wide salary reductions earlier this year and Genting Malaysia Bhd said in June it was cutting thousands of jobs, due to COVID-19.
Nearly all of Lim’s 76% stake in Genting Hong Kong is now committed amounting to 6 bill shares, according to a Hong Kong stock exchange filing at the end of last month – up from 5.5 bill shares in April.
As of March, he had pledged 550 mill of his Genting Bhd shares – or 32% of his holdings – compared with 70 mill a year earlier, according to the company’s annual report.
According to Bloomberg, Lim’s fortune is now valued at about $700 mill, excluding pledged shares, down from $1.5 bill at the beginning of the year.
Tourism and casino companies have suffered amid lockdown measures and travel curbs to halt the spread of the virus.
One of Genting Hong Kong’s cruise ships had her passengers quarantined in February after some tested positive for Covid-19.
According to Bloomberg, the suspension of payments could lead to defaults.
“Such events of default would give rise to a right for requisite creditors of the Group to declare that the financial indebtedness owed to them are immediately due and payable,” the company said in the filing.
As of 31st July, the outstanding financial indebtedness of the group was $3.37 bill. Its companies have also failed to pay €3.7 mill for ship financing, the filing also revealed.
