SINGAPORE — Cruise operator Genting Hong Kong has agreed to sell Zouk Group for S$14 million as part of its efforts to offload non-core assets to boost its liquidity.
Singapore-based Zouk Group will be sold to Tulipa Limited, which is owned by Lim Keong Hui, the son of Genting Group chairman and chief executive, Lim Kok Thay, according to a statement issued by Genting Hong Kong to the Hong Kong stock exchange on Tuesday night (1 September).
Lim Keong Hui had resigned as executive director and deputy CEO of Genting Hong Kong on Friday (28 August) “in order to devote more time to other business commitments”.
Zouk Group operates the Zouk discotheque, restaurant and lounge, which has been ranked among the best clubs in the world by several entertainment publications. As at 31 July 2020, the unaudited consolidated net asset value of Zouk Group was about HK$72.6 million (S$12.7 million)
The sale is expected to result in a gain of about HK$6.7 million (S$1.2 million) which will be used as working capital for Genting Hong Kong, the statement said.
“We continue our efforts to conserve cash and to seek additional sources of finance, including disposal of non-core assets and investments, to sustain our business pending resumption of cruise operations,” the company said.
Concerns were raised over Genting Hong Kong's finances after it said on 19 August that it had suspended all payments to creditors and that remaining available cash will be channelled to maintain critical services for the group’s operations. The company blamed its cash crunch on the coronavirus pandemic, and said it owed a total of US$3.4 billion as of 31 July.
Genting Hong Kong has suspended almost all of its cruise operations since February 2020 due to the pandemic and expects them to resume in January 2021.
On 28 August, the cruise operator reported net loss widened to US$742.6 million (S$1 billion) in the first half from a loss of US$56.5 million in the same period a year earlier, while revenue plunged 69 per cent to US$226.23 million.
Genting Hong Kong acquired Zouk Group from Lincoln Cheng in October 2015 for an undisclosed amount.
The disposal is expected to be completed on 4 September, or a later date as mutually agreed by the buyer and the seller.