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On 3/31/2021 at 1:06 PM, So_Tweetie said:

Do you mind sharing the name of your insurer? We are booked for the July 3 sailing (maybe will meet you onboard!) and are in need of similar coverage. TIA!

 

The travel insurance is called Worldwide Trip Protector from Travel Insured International. There is another policy called Worldwide Trip Protector Lite. The "Lite" does not cover financial default/bankruptcy but the regular plan does.

 

https://www.travelinsured.com/

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Just now, MarkWiltonM said:

The travel insurance is called Worldwide Trip Protector from Travel Insured International. There is another policy called Worldwide Trip Protector Lite. The "Lite" does not cover financial default/bankruptcy but the regular plan does.

 

https://www.travelinsured.com/

I should add that it's possible the plans vary depending on the state you live in.

 

Regrettably, we canceled our booking for July 3 so we won't see you on board the Serenity. I hope you have a wonderful trip! For us, the hassle of getting to Bimini on the sometimes unreliable ferry, the hassle of getting a PCR test and a Bahamas health certificate within the required time frame, and our concerns about the quality of the Bimini Hilton's facilities and service, based on reviews and photographs from reviewers, and the fact that the weather will be very hot and probably stormy as well, led us to rethink the cruise. We're going to wait until U.S. ports open.

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Posted (edited)

One has to admire Genting HK’s competent and dexterous efforts to overcome business problems which are threatening its survival.

 

NEWS FROM SINGAPORE (4/1/21) - More than 120,000 people have set sail on Royal Caribbean and Genting Dream cruises, with no Covid-19 cases on board since a pilot program to reboot the cruise industry began last November, said the Singapore Tourism Board.  This article indicates that 50,000 people cruised on Royal Caribbean, so 70,000 must have cruised on Genting.

 

More-than-120000-have-taken-cruises-to-nowhere

Edited by Jim9310
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4 hours ago, Jim9310 said:

One has to admire Genting HK’s competent and dexterous efforts to overcome business problems which are threatening its survival.

 

NEWS FROM SINGAPORE (4/1/21) - More than 120,000 people have set sail on Royal Caribbean and Genting Dream cruises, with no Covid-19 cases on board since a pilot program to reboot the cruise industry began last November, said the Singapore Tourism Board.  This article indicates that 50,000 people cruised on Royal Caribbean, so 70,000 must have cruised on Genting.

 

More-than-120000-have-taken-cruises-to-nowhere

 

The Singapore Government took harsh measures and essentially wiped out COVID in Singapore before there were vaccines.  I suspect things will not be as good for cruises in the Bahamas and other locations where COVID is still rampant. 

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Posted (edited)
1 hour ago, cruiserchuck said:

 

The Singapore Government took harsh measures and essentially wiped out COVID in Singapore before there were vaccines.  I suspect things will not be as good for cruises in the Bahamas and other locations where COVID is still rampant. 

Totally agree. There was virtually no Covid in Singapore when the cruises started and only Singapore residents are allowed to cruise. Nobody is allowed into Singapore without a 2 week quarantine in a government-controlled hotel and multiple negative tests. 
 

Hopefully, however, having everyone vaccinated on the Bahamas cruises will alleviate concern.

Edited by Cruise-y
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The last line is interesting.....

Letters from investors, expressing an interest to invest in one of the company’s cruise brands were reportedly received.

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8 hours ago, PaulMCO said:

The last line is interesting.....

Letters from investors, expressing an interest to invest in one of the company’s cruise brands were reportedly received.


I think that is key...  Genting has always shown a preference for minority investors — as long as that model is working, there is less need to divest anything.

 

Vince

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The real key here seems to be what Genting needs to do to survive.  Management has listed 8 specific items in its going concern discussion in the unaudited financial results that they released on March 31.  The first one listed is:

 

"Notwithstanding the above, significant uncertainty exists as to whether the Group can achieve the plans and measures described above, and if any of the above measures which include:


1. Whether the Group can agree with its financial creditors represented in the Ad Hoc Group to implement a consensual solvent restructuring solution in the next two months. The restructuring plan should include: (i) obtaining an extended debt holiday for the Group’s borrowings up to December 2022 in addition to the existing approved debt holiday, (ii) obtaining waivers from compliance with bank covenants throughout the extended debt holiday period up to December 2022 to address any potential non-compliance with the bank covenants imposed by the financial creditors, (iii) obtaining approval for interest step down for some of the Group’s borrowings, (iv) converting the Group’s existing letter of credit facility to a term loan to finance the Group’s working capital requirements and (v) formalising the forbearance from enforcement currently observed by the Group’s financial creditors in relation to the Group’s Events of Default."
 

Other things listed include raising $50 to $100 million from an existing business partner or other investors, obtaining a $300 million Euro loan to finish the Global Dream and another $280 million Euros to repay the bridging loan on the Endeavor.  A lot of this is pretty daunting but not impossible.

 

The most interesting piece and probably the most challenging is likely item 1 quoted above - implementing a consensual solvent restructuring solution in the next two months.  The timeline is that of Genting management and the target is roughly June 1.  Can that date slip - it certainly can.  But I would think that the creditors have had a hand in the timing and other statements in the financials indicate that the debt holiday extends to June 30 or whenever a restructuring is completed.  They have been working on the restructuring since last August.  Presumably there will be some kind of news in the next couple of months.

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I agree those dates are flexible -- they've moved before and likely will again if it's in everyone's best interest.  The path forward for the industry comes more into focus (for better AND worse) every week, and investors, lenders and suppliers all seem to be benefitting from a clearer picture of what operations might look like for the next 6-24 months, and not just what 24+ months look like, and I've heard of a couple of cases with hotel like Genting's (but with hotel operators) where these deadlines have stretched on to the mutual benefit of everyone.  That doesn't stretch forever, but I wouldn't be surprised if this extends later rather than reach a harsh deal.

 

Vince

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I don't disagree that the dates might well slip.  However, I would note this is the first time we have seen a date stated for the restructuring and the end of the debt payment holiday.  I think one of the major issues will be cash flow.  By not servicing the debt they have preserved cash.  But they still have plenty of cash burn (from page 24 of the unaudited financials):

 

"As at 31 December 2020, cash and cash equivalents amounted to US$242.8 million, a decrease of US$352.3 million compared with US$595.1 million as at 31 December 2019.
The decrease in cash and cash equivalents was primarily due to cash outflows of (i) cash outflows from operating activities of US$627.2 million; (ii) US$558.8 million for capital expenditure of property, plant and equipment; and (iii) US$793.9 million for repayments of existing bank loans and borrowings and payments of interest and financing costs, net of refund. Cash outflows were partially offset by cash inflows of (i) US$22.5 million proceeds from sale of property, plant and equipment; (ii) US$102.1 million proceeds from disposal of subsidiaries, net of cash disposed of; (iii) decrease in restricted cash of US$199.2 million; (iv) US$1,212.6 million from the drawdowns of loans and borrowings; and (v) US$39.3 million capital contribution from non-controlling interest."

 

They indicate that their biggest source of cash inflow was from drawdowns of loans and borrowings ($1.21 Billion).  How long they can continue to obtain additional loans and borrowings is an interesting question.  Obviously they have burned some additional cash in the three months since 12/31/20 but with operations at Dream, Star and Crystal moving into gear, the burn rate should slow down.  They note on page 11 that the startup of the Dream ships has "reduced the burn rate of the Dream Cruises and have improved cash flows."  That is good news at Dream and as a component of Genting as a whole it is favorable.  But it does not say the burn has been eliminated either for Dream or Genting as a whole and certainly gives no indication about the burn at Crystal or Star individually.  But with the Serenity sailing at a 900 capacity there might be good news on the horizon as respects Crystal's cash burn rate.

 

If any big lender or a consortium of smaller lenders do not go along with the a restructuring plan and insists on getting paid that will require cash to cover those payments.  And that could be a big hit given what is in the till.  And there really are not a lot of hard assets to sell to raise cash to make those payments.  I would guess that there is not really much of a market for either the shipyards or the ships at the current time but I could well be wrong.  Every asset has its price but I just suspect that the prices for those assets are a bit depressed right now (think the Azamara sale at a big discount for example).

 

So, I tend to think that the cash flow issues are the driving force in the establishment of the dates that management has outlined.  I could well be wrong about that and we will see in a couple of months one way or the other.

 

 

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Posted (edited)

I don’t feel like I have anywhere near enough context on the cash burn to reach any conclusions.  That leaves me reading the tea leaves on the operations side, which can be a completely futile exercise.

 

Genting made modest steps during the suspension of operations to preserve cash, but overall they’re going full-steam on projects across the board with reopening and even expansion.  ALL of these projects are expensive to launch, with construction, fitting out, staffing, etc...  There are plenty of parts still paused (Lloyd Werft, idle ships, Global #2), but expansion continues on almost all fronts at the same time (RWLV, Endeavor, Global Dream, etc.).

 

Travel suppliers that don’t know where their next meal are coming from usually put expansion plans on hold completely, and suppliers that are worried about their next meal focus on one development at a time.  To say their cutbacks haven’t reached either of those two levels yet is an understatement.

 

As a project manager I read everything one milestone at a time.  I totally agree with your overall assessment in the big picture, but as fragile as the situation looks, something negative doesn’t seem eminent yet.  They seem to be confidently expecting something to come together here or they would already be enacting other mitigation measures.  
 

That said of course, nothing is finalized and there are a slew of reasons any of those plans could fall apart in the next couple of months — especially in a global pandemic.  ...Or they could just be completely delusional.

 

Vince

Edited by BWIVince
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4 hours ago, BWIVince said:


 

That said of course, nothing is finalized and there are a slew of reasons any of those plans could fall apart in the next couple of months — especially in a global pandemic.  ...Or they could just be completely delusional.

 

Vince

 

There are many words you can use to describe someone who becomes a billionaire, but I don't think delusional is one of them! (Know you know that!!😜)

 

Patty

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1 hour ago, Texas Tillie said:

 

There are many words you can use to describe someone who becomes a billionaire, but I don't think delusional is one of them! (Know you know that!!😜)

 

Patty

 

Haha...  I can never rule that out.  The richest people in my family were hands down the craziest.  😉  I'm not saying there's a definite connection, but I think sometimes applying too much logical thought sometimes suppresses potential success.

 

Vince

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Posted (edited)
6 hours ago, BWIVince said:

I don’t feel like I have anywhere near enough context on the cash burn to reach any conclusions.  That leaves me reading the tea leaves on the operations side, which can be a completely futile exercise.

 

 

Even with GHK’s newly released financial information, it’s very hard to “read the tea leaves” regarding Crystal’s financial situation.  As they resume operations, cash burn may accelerate, since cash flow will be highly constrained.  Initially, they have to accommodate, feed, provide libations, and entertain many loyal passengers who are using their FCCs and FCDs, thus creating start-up expenditures not covered by inflowing cash. In addition, they are assuring those now paying cash that deposited funds will be refundable, because they are being held in a reserve account. 

Genting is an exceptionally clever, well-run organization, with ample “Guanxi[Wikipedia.org/Guanxi].  If impatient lenders and investors force Genting to declare bankruptcy, many of them are likely to recover very little.  Lessors are likely to recover the most.

Edited by Jim9310
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6 hours ago, BWIVince said:

As a project manager I read everything one milestone at a time.  I totally agree with your overall assessment in the big picture, but as fragile as the situation looks, something negative doesn’t seem eminent yet.  They seem to be confidently expecting something to come together here or they would already be enacting other mitigation measures. 

 

Vince -

I don't have the knowledge and expertise that you have in terms of the operational real world of the travel business and you are correct that I am only looking at the "big picture" and totally from an outsider's perspective.  And Jim makes an excellent point about the "Guanxi" that is important in this whole picture.  I guess one of the questions is whether the existing lenders and creditors are part of the Guanxi network or outside that family and of course new investors could emerge from the Guanxi.  We will see.  Interesting times indeed.

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15 minutes ago, Jim9310 said:

 

Even with GHK’s newly released financial information, it’s very hard to “read the tea leaves” regarding Crystal’s financial situation.  As they resume operations, cash burn may accelerate, since cash flow will be highly constrained.  Initially, they have to accommodate, feed, provide libations, and entertain many loyal passengers who are using their FCCs and FCDs, thus creating start-up expenditures not covered by inflowing cash. In addition, they are assuring those now paying cash that deposited funds will be refundable, because they are being held in a reserve account. 

 

Genting is an exceptionally clever, well-run organization, with ample “Guanxi” [Wikipedia.org/Guanxi].  If impatient lenders and investors force Genting to declare bankruptcy, many of them are likely to recover very little.  Lessors are likely to recover the most.

 

 

I totally agree on both points...  It's expensive to restart, and it will absolutely accelerate cash burn most of this year.  That seems to be in the plan, but that's why I said the tea leaves are so hard to read.

 

Your second point is the single thing I think that underpins my hunch I mentioned above.  Genting's investor groups have more to lose by being impatient than they have to gain, and I think we'd have seen signs by now if they didn't feel the same way.

 

On the note of deposits, the change in the new policy is that they're supposed to have sufficient operating cash and credit lines to cover the non-refundable deposits...  The refundable deposits should have ALWAYS been recoverable.  It's just no one (I'd say at any cruise line) ever imaged a case where 100% of the non-refundable revenue for every booking on the books, globally, system-wide would have to be either refunded or rebooked, plus would rush in as chargebacks.  Covid also blew out every historical formula on the percentage of people requesting a refund vs. reallocating the cash to a different sailing, making matters even worse.  Hopefully we won't need to test that out again anytime soon.

 

Vince

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A bit further review of the transaction indicates that about $249 million of the cash infusion is coming from Ocean World which the document suggests is a direct wholly owned subsidiary of the Company (the Company being Genting HK).  So that looks like a bit of internal financial engineering,  The other $59 million is coming from an outside source - Darting.  From my personal perspective I would have loved to see the additional cash flow into Crystal Cruises LLC as opposed to Dream Cruises. 

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I'm not surprised by the priority -- Dream's need is urgent and GHK's divisional future is hanging on Dream at this point.  I think more news will be coming about Crystal one way or another, but Crystal is certainly not in the position Dream is in at GHK.  

 

Vince

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Posted (edited)

Here’s Genting HK’s 2019 press release announcing TPG Capital Asia, TPG Growth and Ontario Teachers’ Pension Plan’s initial equity investment in Dream Cruises. 

Gentinghk.com Press Release August 6, 2019
 

Since pension plans usually avoid risky investments, it’s encouraging to learn that OTPP may be investing US$59 million additional equity capital in spite of recent financial problems caused by the pandemic.  However, the April 15 announcement refers only to Darting.  TPG Darting Ltd. is wholly owned by TPG Capital Asia and Growth funds.  

 

 

Edited by Jim9310
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  • 2 weeks later...
11 minutes ago, 2cagain said:

Here is a Non Subscriber version of same announcement.  Sounds like good news. 
https://www.theedgemarkets.com/article/genting-hk-raise-us154m-additional-liquidity-restate-us26b-debt-tackle-covid19-hit


Anyone care to speculate if this means anything in regard to the refund Crystal owes me for cancelled cruises??🙄

 

Patty

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