Risk of insolvency: MV shipyards send SOS

Risk of insolvency MV shipyards send SOS

Showdown on the Baltic Sea coast: the fate of MV will be decided in the next few days shipyards. The parent company Genting is pushing for state aid worth millions to finish building the world’s largest cruise ship.

They have experience with bankruptcies in Wismar, Rostock and Stralsund. The shipyards on the East German Baltic Sea coast have already gone through insolvency proceedings several times. Owners changed and employees were laid off. But it always went on. Somehow. Also this time?

That there is a crisis at the MV shipyards has been known for months. But how delicate the situation actually is, only became clear on Friday when trading in shares of the Asian Genting group, which shipyards in 2016 for the construction of cruise ships for its own shipping companies, was suspended on the Hong Kong stock exchange . Almost at the same time, the due payment of wages and salaries for the approximately 2,000 employees in Wismar, Rostock and Stralsund was postponed to next week. “We have 30 million euros in liquidity. But there are legal framework conditions under which we were not able to pay wages and salaries today,” said Managing Director Carsten Haake after a staff meeting. The future of Lloyd Werft in Bremerhaven, which also belongs to Genting, is also uncertain.

The background is apparently the pending agreement on a rescue package that the federal and state governments have been negotiating with Genting Hong Kong for weeks. Haake announced that further talks, also at the highest level, are planned for the weekend. If no agreement is reached, an application for insolvency at the beginning of next week is probably inevitable.

On Sunday, Haake and the President of Genting Hong Kong, Colin Au, once again appealed to the federal government to consider their negative attitude. “It’s about thousands of families,” said Au. In addition, an entire industry including suppliers at home and abroad is threatened. “Droping the shipyards now would be the biggest economic mistake the federal government could make,” emphasized Au. Haake accused the federal government of having caused the current problem by blocking the payment of funds for the construction of the ship “Global Dream”, which costs around 1.5 billion euros, when an intermediate construction status, the so-called Milestone F, was reached last December may be. According to Haake, the risks for the finished construction of the ship are too great for the federal government due to developments in the cruise industry.

Haake assumes that the federal government does not want to move at the moment and that Genting cannot move. Genting cannot make any more compromises. “We have worked through the requirements of the federal government,” he said. Four of Genting’s proposals were rejected by the federal government.

A ship as security

” We stand by the side of the company and its employees to get through this difficult time together. It is now solely up to the owners to also make an appropriate contribution,” said State Secretary for Economic Affairs Udo Philipp of the German Press Agency. However, Genting Hong Kong is currently not ready for this. The owners lack a clear commitment to their shipyard. “This is disappointing and endangers many thousands of jobs in the region,” complained Philipp. Federal Economics Minister Robert Habeck (Greens) and Federal Finance Minister Christian Lindner (FDP), who both have to agree on possible federal funds, are faced with the first difficult decision as to whether they should release the funds anyway. It should not remain the last regulatory conflict. The ailing department store group Galeria Karstadt Kaufhof is currently struggling for further state aid.

After the corona-related collapse of the cruise market at the beginning of 2020, the Genting group, which earns its money mainly in tourism and gambling, got into financial difficulties. The trend reversal expected for 2021 did not materialize. The takeover by Genting five years ago was still considered a stroke of luck for the shipyard group. In response to the cruise market, which was booming at the time, Genting invested heavily, increased the workforce and ordered ships for the group’s own shipping companies, including the huge cruise ship Global 1. The ship, which cost 1.5 billion euros and was designed for 9500 passengers, is already three quarters done. The hopes of the employees in Mecklenburg-West Pomerania now rest on him. The ship was also to be used as collateral for the federal cash injection.

Shipyard boss Haake was confident, despite the delicate situation, that the Global 1 can be completed. “Hope dies last. We are in a shipyard. And we are used to the fact that there are sometimes difficult times. I believe we will finish building the ship,” he said.

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