How a billionaire’s crusade empire was implemented in Hong Kong | Business and Economics

Lim Kok Thay founded a Hong Kong cruise and gaming ship business in the 1990s and became one of Asia’s largest cruise operators.

It was a love affair, as well as a way to diversify the casino business that his father, Lim Goh Tong, founded in Malaysia. Now 70 years under Kok Thay, Genting Hong Kong Ltd. expanded its fleet of ships, bought other cruise lines, and even added German shipyards to build its ships.

Now, more than two years into the coronavirus pandemic, Kok Thay’s company is going into liquidation. Genting Hong Kong filed a petition last week to end its business in one of the biggest setbacks since a cruise operator hit the pathogen industry. Coronavirus is a notable example of what put the old business on its knees, which could affect cruise customers across the region.

“I was so upset to hear the news,” said Chloe Then Sheau Nyuk, who was on board the Malaysian Penang cruise ship and was traveling to Phuket and Krabira, Thailand. One of the things she liked most was that she woke up with her husband at 6am to get some sun from her upper back.

A Genting spokesman declined Bloomberg’s request to interview Kok Thay. A representative from Genting Hong Kong did not immediately comment.

Kok Thay founded Genting Hong Kong in 1993 and bought ferries from a failed cruise line to operate under the Star Cruises brand. His first ships were second-hand, and he began buying new ones in the late 1990s during the Asian Financial Crisis.

Over the years, Genting Hong Kong has expanded its business beyond Star Cruises, in part by purchasing other cruise lines. He bought the Crystal Cruises brand in the US and created the top Dream Cruises in Asia.

It was a time when the giants of the cruise world, Carnival Corp, for example, were advancing as the sector continued to set new records for the people who traveled.

The company began buying several shipyards in Germany in 2015 to build its own vessels.

But as the pandemic forced cruise liners to halt operations, Kok Thay’s long-term commitment to the industry – and the growing demand from the rest of China and Asia – began to wane. The company offered “high tides” as part of a broader trend of cruising anywhere, with a loss of still $ 1.7 billion in May. The writing was on the wall.

Earlier this month, MV Werften, a wholly-owned shipbuilding subsidiary, filed for insolvency in a local German court.

And last week, Genting Hong Kong, 76% of Kok Thay, filed for bankruptcy in Bermuda and appointed temporary liquidators. He said his money would run out by the end of January and he had no access to further funding.

The company “exhausted all reasonable efforts” to negotiate with creditors and stakeholders, the Hong Kong exchange said in a statement. Shares in Genting Hong Kong fell more than 60% from a November high before a break on January 18th.

Peninsula Petroleum Far East Pte. Since 2017, he has filed a lawsuit in the U.S. to return $ 4.6 million unpaid for bunker fuel he delivered to three ships in Genting. The Crystal Symphony, a luxury cruise ship operated by Genting Hong Kong, would be hijacked if. He was docked in Miami as planned, according to J. Stephen Simms, the attorney general for the representative of the Far East Far East Peninsula Petroleum, who was informed of the plan. Vessel tracking data indicate that the ship docked in the Bahamas on Saturday evening, where a U.S. arrest warrant could not be executed.

Reservations are still available on the Genting Hong Kong website for travel anywhere in Hong Kong and Singapore. The already scheduled Dream Cruises trip will continue, according to a company representative.

‘Living with the virus’

Genting Hong Kong’s difficulties reflect attention in Asia, where large markets such as China and Hong Kong are still closed and following Covid-Zero strategies. Other cruise operators, such as Carnival and Royal Caribbean Cruises Ltd., are bouncing back as markets such as the US, America and Europe are “living with the virus”.

Although Kok Thay has suffered a blow to the cruise business, his father is now just a part of his large group that started with a hillside resort called Resorts World Genting, a drive away from Kuala Lumpur for more than an hour. It is the only licensed casino station in a Muslim-majority country that puts gambling in the spotlight.

Kok Thay, who maintains a low profile, and his father worked to expand and diversify the business beyond Malaysia, making it one of the largest conglomerate of games and entertainment in the world. Today, Genting also operates casino resorts in the UK, Singapore and the US, where the $ 4.3 billion Resorts World Las Vegas opened in June.

His father, who was born in China and moved to Malaysia when he was still a British colony, died in 2007 after a brief illness. Just four years earlier, Kok Thay had already taken over the leadership of the group.

One question is whether Kok Thay will try to rescue Genting Hong Kong with the help of other companies in the group. Genting Malaysia Bhd. the company, which manages the country’s casino station, had previously invested in Genting Hong Kong more than two decades ago. It sold its 17% stake in 2016 for $ 415 million.

However, analysts say that Genting’s illnesses in Hong Kong will not frustrate Kok Thay’s intentions for the Genting group.

Genting Hong Kong had a record loss of $ 1.7 billion in May [File: Lam Yik/Bloomberg]

Genting Malaysia, financial fugitive Jho Low in 2019, bought the kidnapped Equanimity superyacht hijacked by the Malaysian government for $ 126 million, preparing to open a new $ 800 million theme park in the country. Genting Singapore Ltd. is expanding $ 4.5 billion ($ 3.3 billion) in its Resorts World Sentosa, one of the largest casino resorts in Southeast Asia.

None of the companies has a cross-shareholding with Genting Hong Kong, with the exception of Kok Thay, which owns shares in each of them.

“The expansion plans of other Genting companies should not have a negative impact,” said Samuel Yin Shao Yang, an analyst at Maybank Investment Bank Bhd. in Kuala Lumpur. “The debts of each company are limited” in those companies, he said.

Genting Hong Kong’s problems could help competitors choose to focus more on the Asian cruise market, said Jaime Katz, a senior stock analyst at Morningstar Inc. in Chicago.

But Motley Fool assistant analyst Rick Munarriz said more cruise companies hope to follow the same path.

“Hong Kong Genting will not be the cruise operator that will run out of money,” he said. “Creditors and interest groups are tired of throwing away good money after bad things.”