The Malaysian billionaire's yacht empire collapsed during the pandemic

 The Malaysian billionaire's yacht empire collapsed during the pandemic

Genting Hong Kong failed to focus on Asia, where major markets, such as China, remained closed, pursuing a Zero Covid strategy.

Lim Kok Thay opened a tour boat and yacht and casino business in the 1990s in Hong Kong, turning it into one of Asia's largest cruise operators. This is a job that serves his hobby, and is also a way to diversify the casino business that his father - Lim Goh Tong - founded in Malaysia. Under the direction of Kok Thay, now 70 years old, Genting Hong Kong expanded the number of boats, bought other companies and even bought German shipbuilders to build yachts for the company.

But now, after more than 2 years of struggling in the pandemic, Kok Thay's company is about to stop doing business. Genting Hong Kong last week sent out a shutdown notice. It's one of the biggest cruise ship collapses since the pandemic emerged, and the clearest example of how the pandemic can bring down a thriving industry.

"I am very sad to hear this news," said Chloe Then Sheau Nyuk, who used to go on a cruise with Genting Hong Kong. She says that one of her favorite things is waking up with her husband at 6 a.m. to watch the sun rise over the deck.

The airline's Genting Dream yacht in Hong Kong. Photo: Bloomberg

The airline's Genting Dream yacht in Hong Kong. Photo: Bloomberg

In a notice filed with the Hong Kong Stock Exchange, Genting also said that Kok Thay had resigned from the position of chairman and CEO of this company, from January 21.

He founded this company in 1993 as Star Cruises, then bought cruise ships from bankrupt cruise companies to operate. Their first fleet was all old ships. It was not until the Asian financial crisis in the late 1990s that they started buying new ships.

In the following years, Genting Hong Kong gradually expanded its operations by acquiring other cruise lines. Since 2015, they even acquired several German shipbuilders to build their own yachts.

However, the pandemic forced cruise lines to shut down. Kok's Expectations Instead, the long-term outlook for the industry and rising demand in Asia is starting to falter. Despite offering a "resort on the sea", following the trend of non-moving yachts, the company still recorded a record loss of $ 1.7 billion in May.

Then, earlier this month, their shipbuilder - MV Werften - announced insolvency in a court in Germany. Last week, Genting Hong Kong (currently 76% owned by Kok Thay) – announced its shutdown and appointed a person in charge of the liquidation process. They said the cash could run out this month and no other source of funding could be accessed.

Genting's notice sent to the Hong Kong exchange said it could not negotiate with creditors and related parties. Shares of the company have fallen more than 60% from their November peak before being suspended from trading on January 18.