The shares are suspended. The shares of the conglomerate Genting will no longer be traded on the Hong Kong stock exchange until further notice. The bankruptcy of the MV shipyards is now spreading to the Far East. The company had to file for bankruptcy on Monday. The federal government was basically ready to help out, but did not want to abandon its demand for a contribution from the owner. What was missing was a clear commitment from Genting, the owner.
In 2016 it was completely different: the company and its Malaysian patriarch, billionaire Lim Kok Thay, were greeted with bouquets of flowers and parties in the East German shipyards, especially at the headquarters in Wismar. At the time, the man with a penchant for gambling seemed like winning the lottery himself to the Germans, having had a couple of painful years under the previous Russian owner. And Genting came with bags full, contracts to build ten ships, everything from yachts to pleasure craft like that Global Dream, the largest cruise ship ever built in Germany.
“Back then there was not just an investor, but also a good idea, namely to build cruise ships for Asia. There was a market,” says Daniel Friedrich from IG Metall Coast. “In my more than 20 years I have not seen an investor in East Germany who has invested in the locations in such an exemplary manner and as agreed.” Genting is said to have invested around two billion euros in the shipyards. The structurally weak region applauded: The number of employees doubled to around 3,000 in a few years. Unbelievable.
Genting’s company history sounded similarly fabulous. The group was founded by Lim Goh Tong, the father of the current head of the company. In 1937, at the age of 19, the senior emigrated to Malaysia from the southeast Chinese province of Fujian during the Japanese invasion. In 1963 he visited the Cameron Highlands in the heart of Malaysia, actually he was supposed to build a hydroelectric power station there. But because he was so taken with the fresh air, he decided without further ado to build an amusement park on the top of Mount Ulu Kali. Today the resort consists of a casino and almost 200 restaurants, guests can stay in six hotels at 1,800 meters above sea level, for example in the First World Hotel, which was expanded in 2015 and has since been the largest guest house in the world with 7351 rooms.
In times of need, shipowners offer trips to nowhere
Genting remained loyal to power plant construction. Palm oil plantations were added. And of course the cruise ships: Star cruises, Dream cruises and Crystal Cruises are called the lines. In 2003 the old man retired and handed it over to his son, who has since then mainly internationalized the business. Genting is involved in a resort on Sentosa Island in Singapore and also in the USA: Lim had a hotel with an attached casino built in Las Vegas. 3500 rooms. It cost $ 4.3 billion. The inauguration ceremony last summer.
Things were no longer going smoothly at the MV shipyards. Corona hit Genting hard. No new steamers are needed during a pandemic, especially not in completely sealed off China or Hong Kong, where business had grown in previous years.
In their distress, the Hong Kong shipowners have started offering trips to nowhere. Passengers board the ship in the former British crown colony, which then cruise through the Pacific without landing. Sometimes in the direction of the Philippines or north to Taiwan. Bands play on board, there are lavish buffets and of course there is also play in the ship’s casinos. Black Jack, Roulette. After a few days, the steamers arrive again in the port of Hong Kong.
At the Baltic Sea they felt the effects immediately: As fast as the shipyards grew, things went downhill again: Last February, shipbuilders at the three locations in Wismar, Stralsund and Rostock met to demonstrate, a planned cut of 1,200 jobs scared them . At the end of June, Mecklenburg-Western Pomerania’s Prime Minister Manuela Schwesig (SPD) was at the christening of the luxury yacht Crystal Endeavor in Stralsund: She spoke of “a sign of new beginnings for Germany as a shipbuilding location”. In the shipyards they already knew better back then.
Last Friday the workers should have received their December wages; the fact that bankruptcy was only filed on Monday caused displeasure among the workforce. “Either I can pay or I submit the application immediately,” says IG Metall man Friedrich. There is now a provisional insolvency administrator: The Schwerin District Court appointed the Hamburg lawyer Christoph Morgen. He will be responsible for four of the eight companies responsible for production. Another administrator is to be announced for the other four in the course of the week.
“The bankruptcy is bitter, but it is not the end either,” said Prime Minister Schwesig on Wednesday, the focus of efforts should now be on the Global dream, which is 75 percent completed in Wismar, to be completed – and above all to find a perspective for the locations.
What about Genting’s stock in Hong Kong? They remain suspended from trading for the time being. At least until the outcome of legal proceedings at the Schwerin Regional Court. Genting is suing the state of Mecklenburg-Western Pomerania for the disbursement of a loan of 88 million dollars (78 million euros). Schwerin granted the loan in June 2021 to close a possible later liquidity gap at Genting. The court wants to announce its decision next Monday.