Asian shipbuilder in Germany to file for bankruptcy

FRANKFURT (AFP) – German cruise ship maker MV Werften announced plans to file for bankruptcy on Monday, January 10, as the coronavirus pandemic scuttled the subsidiary of Asian tourism and casino giant Genting.

“The bankruptcy filing should be filed today,” a spokesperson for MV Werften told AFP on Monday.

The ailing shipbuilder was taking the plunge after failing to secure funding for the completion of the mega-liner “Global One”, already 80 percent of the way to construction, according to the company.

Designed to carry 5,000 passengers in 2,500 cabins, the massive ship was due to leave the shipyard in 2021, but the pandemic has sidetracked the company’s schedule and slashed its budget.

About 600 million euros (S $ 921 million) are needed to finance the completion of the ship, for which the shipbuilder has requested government support.

The decision to declare bankruptcy came after lengthy discussions with officials in which the two sides “clearly did not find common ground,” the spokesperson said.

The Global One ship is located in Wismar, one of MV Werften’s three shipyards along the Baltic coast of the former eastern state of Mecklenburg-Western Pomerania, where it employs around 2,000 people.

In June, the state took a 60 million euro stake in the company and granted a 47 million euro loan to the company.

In total, the government has offered financial support of around 300 million euros to MV Werften since the start of the pandemic.

The collapse was a “dark day for shipbuilding,” said local IG Metall union leader Daniel Friedrich.

Completing Global One and delaying the payment of wages for December were priorities for the union, which criticized “the exhaustion of trust” between negotiators.

With travel still very limited, especially to Asia, the company has seen demand for huge cruise ships and luxury mega-yachts decline.

The industry has also been rocked by a wave of recent coronavirus outbreaks on passenger ships despite increased health measures, bringing new headaches to the industry affected by the pandemic.

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