GGRAsia – Genting HK completes sale, leaseback of Genting Dream

Genting HK completes sale, leaseback of Genting Dream

Jan 17, 2020 Newsdesk Latest News, Rest of Asia, Top of the deck

Genting Hong Kong Ltd, an operator of casino cruise ships and an investor in Asian land-based casinos, says one of its units has completed a sale and leaseback exercise for its Genting Dream vessel (pictured) for a total consideration of US$900 million.

“Part of the funds received was used for repayment of the outstanding balance of approximately US$502 million in respect of the existing bank loan for Genting Dream,” said Genting Hong Kong in a Wednesday press release.

The filing identified the purchasers as entities linked to four mainland China-based banks: BCLC SPV, an investment holding company controlled ultimately by the Bank of Communications Ltd; CMBFL SPV, a subsidiary of China Merchants Bank Co Ltd; and CCBFL SPV, an indirect wholly-owned subsidiary of China Construction Bank Corp; and China Development Bank Financial Leasing Co Ltd.

As part of the deal originally announced in September, Genting Hong Kong’s subsidiary signed a “bareboat charter agreement” under which the suitors agreed to lease back the vessel to Genting Dream Ltd for a period of 12 years, commencing from the date the ship is delivered to the purchasers.

Under the agreement, Genting Hong Kong is to repurchase the vessel once the 12-year charter period ends. The agreement also states that Genting Hong Kong can exercise a purchase option during the leasing period or that an agent acting on behalf of the purchasers can exercise a put option, allowing it to sell the vessel under certain conditions.

Genting Dream, the first ship of the Dream Cruises brand, made its maiden voyage in April 2017. The vessel is one of the three existing cruise ships operated under the Dream Cruises business segment.

“We are very appreciative of the consortium for supporting Genting Hong Kong in the refinancing of Genting Dream which allows a longer repayment period with a balloon payment at the end of 12 years,” said Lim Kok Thay, chairman and chief executive of Genting Hong Kong, in a prepared statement.

He added: “With the completion of this transaction, the group is now focusing on launching new summer itineraries for Dream Cruises … with exciting new destinations.”

Genting Hong Kong has been seeking funds to finance the expansion of its cruise business. The company has developed a three-brand cruise portfolio with focus on different market segments: Crystal Cruises for what it terms the ultra-luxury segment; Dream Cruises for what it describes as the premium segment; and Star Cruises for what it defines as the contemporary segment.

Mr Lim said in Wednesday’s announcement that the company was “looking forward” to launching the Crystal Endeavor vessel in August this year and its Global Dream cruise ship in 2021.

In December, the Hong Kong-listed company said that another of its units had agreed to sell and to lease back the under-construction Crystal Endeavor for a total consideration of EUR350 million (US$389.6 million).