Malaysian Billionaire Lim Kok Thay’s Genting HK Eyes Asset Sales Amid Losses

Malaysian billionaire Lim Kok Thay’s Genting Hong Kong is looking at potential asset sales and debt restructuring to help its loss-making cruise liner navigate the challenging business environment brought on by the Covid-19 pandemic.

The operator of Star Cruises posted a net loss of $1.7 billion in 2020, compared with a net loss of $158.6 million the year before, the company said in a filing to Hong Kong’s stock exchange on Sunday evening. There are “material uncertainties which may cast significant doubt about the Group’s ability to continue as a going concern,” it said.

The pandemic has upended the tourism industry as governments around the world implemented lockdowns and restricted travel to contain the spread of the virus. While there are early signs of a recovery and pent-up demand in the leisure travel market, uncertainties prevail as infections continue to spike even as governments accelerate their vaccination programs.

“The cruise industry will undoubtedly struggle in the challenging environment of 2021 and 2022 with the ongoing impact of Covid-19,” company chairman Lim said in a statement to shareholders.

To mitigate the ongoing impact of Covid-19, Lim said the group is embarking on various initiatives including the divestment of non-core business investments. Earlier this month, Genting HK signed an agreement with creditors for a “holistic recapitalization” of the company that involves the amendment and extension of its debts of about $2.6 billion.

Apart from his cruise line business, Lim’s casinos have also been hit hard by the pandemic. Genting Group, the Kuala Lumpur-listed holding company for Lim’s casino, property and palm oil interests, posted a net loss of 2 billion ringgit ($483 million) in 2020.

While Genting Singapore, which operates Resorts World Sentosa and the Universal Studios theme park in Singapore, remained in the black in 2020, net profit tumbled to S$68.5 million ($51.5 million) from S$688.7 million the previous year. Earlier this month, it reported a 26% decline in first quarter net profit as the city-state reported a renewed spike in Covid-19 infections.

Lim, 69, was ranked Malaysia’s tenth-richest person on the Forbes World’s Billionaires List published in April, with a net worth of $2.7 billion, up from $2 billion the previous year.