Genting Hong Kong to help Dream Cruises sail again via new US$248 million shares subscription

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Genting Hong Kong has boosted its stake in Dream Cruises as part of a US$307 million deal aimed at keeping the global cruise ship operator afloat.

The three-way transaction sees Genting Hong Kongs wholly-owned subsidiary, Ocean World, acquire 207.2 new Subscription Shares in Dream Cruises for a consideration of US$247.9 million, while an entity called Darting Investment Holdings Ltd has acquired 49.3 Subscription Shares for US$59 million. Darting had previously acquired a 32.58% stake in Dream Cruises from Ocean World via a series of transactions in 2019 and 2020.

The issue of new shares will see Ocean Worlds interest in Dream Cruises increase from 67.42% to 69.97% while Dartings will fall from 32.58% to 30.03%.

In a filing, Genting Hong Kong said the subscriptions would provide additional liquidity to the Dream Group, which has debts of US$300 million, to help meet its upcoming financial obligations and prepare for the target resumption of its Genting Dream vessel in July, thereby bringing 100% of the Dream Cruises fleet/capacity into operation.

Dream Cruises operates three cruise ships Genting Dream, World Dream and Explorer Dream and is currently building two more ships, Global Dream and Global II, at Genting Hong Kongs MV Werften shipyards in Germany.

Genting Hong Kongs injection of funds comes at a time when it is facing financial troubles of its own, having recently announced a US$1.72 billion loss in 2020 and last August announcing it wastemporarily suspending all payments to the groups financial creditorsin order to preserve liquidity as the COVID-19 pandemic grounded its global cruise ship fleet.

However, the company said earlier this month that it has reasonable grounds to believe that a restructuring can be successfully consummated given the progress of discussions with its lenders.