District Court of Schwerin
Land does not have to pay out credit to MV Weften owners
The gantry crane of the shipyard in Warnemünde. Photo: Bernd Wüstneck/dpa-Zentralbild/dpa
© dpa-infocom GmbH
The Schwerin state government does not initially have to pay out an agreed 78 million euro loan to the mother of the insolvent MV Werften. That doesn’t have to be the end of the story, however.
Stage victory for the state of Mecklenburg-Western Pomerania: For the time being, it does not have to pay out a 78 million euro loan to the parent company of the insolvent MV Werften, Genting Hong Kong.
The district court of Schwerin rejected an urgent application from Genting on Monday. The group was not able to adequately demonstrate that it would be in an existential emergency without the payment of the 78 million euros, the judge said. In order to obtain an injunction before the decision on the main issue, such an existential emergency must exist.
It was initially unclear whether Genting would appeal the decision. A legal representative of the group in the court did not want to comment immediately after the hearing.
At a court hearing on Tuesday last week, Genting referred to the existence of a valid loan agreement from June 2021 and insisted on payment at this point in time. Genting could now appeal, which would bring the dispute to the Higher Regional Court in Rostock. It is also conceivable that the group will submit a so-called main application in order to get the money.
The country had granted Genting Hong Kong the loan in order to close a liquidity gap at the group that was forecast for 2024/2025. Genting reported the need for payment in December 2021 because there was already a gaping liquidity gap. The tourism group Genting has got into difficulties with its cruise business as a result of the ongoing corona pandemic. In Mecklenburg-Western Pomerania, the group had cruise ships built for its own needs.
“We feel confirmed by the judge’s verdict”
The state refused to pay out the loan in December, on the grounds, among other things, that the future of MV Werften was not secured. Last Monday, Genting then filed for bankruptcy for the MV shipyards with around 2,000 employees. Trading in Genting shares was suspended for nearly a week on the Hong Kong Stock Exchange on Jan. 7, and plummeted when it resumed. The price recovered slightly at the end of the week.
Economics Minister Reinhard Meyer and Finance Minister Heiko Geue (both SPD) welcomed the decision of the regional court. “We feel confirmed with the judge’s verdict,” both said in a joint statement. At the same time, they emphasized: “The country was not concerned with generally refusing to pay out the loan. However, a possible disbursement of the loan was not planned until 2024. A payment at this point in time would have presupposed that both Genting and MV Werften continued to have positive prospects as a going concern. However, this is not the case.” In the meantime, Land has also terminated the loan agreement.
The reactions in the state parliament were reserved. The parliamentary group leader of the co-governing left, Jeannine Rösler, appealed to the company management to leave it at the verdict and return to the negotiating table. “Completing Global I is important and still possible,” she said. To do this, however, Genting Hong Kong must be prepared to make an economic offer to buy the ship.
From the point of view of the opposition FDP, the state government can breathe a sigh of relief for the time being, and so can taxpayers. The main proceedings remain to be seen, warned the parliamentary group leader René Domke. From the point of view of the AfD, which is also in opposition, the matter could not be over yet. If Genting is not in existential need, it is not so easy for the country to terminate the loan agreement, said the budget spokesman for the AfD parliamentary group, Martin Schmidt. Genting could also try to sue the state for damages for the falling share price.