The German government has announced that it has agreed to grant a bridging loan to the financially troubled MV Werften shipyards in order to resume operations and maintain employment until spring. Part of Genting Hong Kong in financial difficulty, MV Werften suspended operations in March, citing health restrictions that disrupted the flow of materials to the site.
Under the terms of the deal, MV Werften will receive a € 193 million ($ 228 million) bridging loan from the German Federal Economic Stabilization Fund (FSM). Bridge funding is intended to cover ongoing operating costs as well as the wages and salaries of employees at shipyards.
“This is the result of intense negotiations in recent weeks between representatives of Genting, the MV Werften group, and the federal government, with the participation of the Land of Mecklenburg-Western Pomerania,” said the Land Minister of Finance. , Reinhard Meyer. Under the terms of the agreement, all funds are to be used at the shipyard focusing on the completion of a cruise ship expedition, the Crystal Agreement, which was due for delivery to Crystal Cruises in April 2020.
With the federal government’s approval of the bridging loan, the state authorities, with the approval of the cabinet and the state parliament’s finance committee, also release the remaining funds in a project account for Global I, the first of two 200,000 gross ton cruise ships are also being built at the shipyard for Genting’s Dream Cruises. According to the state government statement, it will amount to around 43 million euros ($ 50 million) to continue construction of the giant cruise ship at the site in Wismar, Germany, to reach d ‘by the end of the year the next stage of its construction.
MV Werften’s three shipyards in Germany are expected to resume work in October as negotiations continue for a long-term bailout. German authorities estimate that a total of more than 500 million euros ($ 590 million) will be needed in the second stage of the MV Werften’s rescue. They are demanding additional reports from independent auditors and noted that the plan would be linked to restructuring measures planned by Genting Hong Kong. According to state ministers, the aim is to secure longer-term funding for the WSF by the end of the year, if possible.
“Intensive work will be done on this in the coming weeks,” said Mecklenburg-Western Pomerania Minister of Economy Harry Glawe. “We have taken a big step forward. The federal rescue fund opened for MV shipyards. This is an important first step for shipyards.
MV Werften said he appreciated the support from Mecklenburg-Western Pomerania State and Federal authorities and assured that all loan funds will be used in Germany for MV WERFTEN shipyards. In 2016, Genting Hong Kong acquired the Neptune Werft shipyard to develop the current facility which employs around 3,000 people at three main sites. To date, MV Werften has completed the construction of four river cruise ships for Crystal Cruises. Work was in progress on the Crystal Cruises expedition cruise ship and the two major cruise ships for Genting when work was suspended.