KUALA LUMPUR (Sept 1): Cruise ship operator Genting Hong Kong Ltd (GEN HK) is selling Zouk Group, a nightclub operator, for HK$79.3 million to Tulipa Ltd as part of its efforts to offload non-core assets and investments and provide liquidity to the group.
The proceeds of the disposal are expected to result in a gain of HK$6.7 million, which will be used as the group's working capital, GEN HK said in a filing with Hong Kong's stock exchange.
Tulipa is wholly-owned by Lim Keong Hui, son of Tan Sri Lim Kok Thay, who is the group's single largest shareholder with a 76% equity stake.
Upon completion of the disposal, Zouk Group will cease to be GEN HK's indirect wholly-owned subsidiary, and as such its financial results, assets and liabilities will no longer be included in the group's consolidated financial statements.
GEN HK said Zouk Group engages in the operations of discotheque, restaurant and lounge under the name "ZOUK". As at July 31, the unaudited consolidated net asset value of Zouk Group was HK$72.6 million.
"At the onset of the coronavirus pandemic, the group has taken swift countermeasures to aggressively minimise expenses and conserve cash to lower our cash burn rate," said GEN HK. "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 group said the completion of the disposal will take place on Sept 4, or such later date as mutually agreed by both parties.
Last Friday, Keong Hui resigned from his position as the executive director and the deputy chief executive officer of GEN HK effective Aug 28, to devote more time to other business commitments.
GEN HK hogged the limelight after it revealed that it opted to suspend all payments to creditors to preserve cash.
The group reported a wider net loss of US$742.6 million for the six-month period ended June 30, 2020, from US$56.5 million a year ago, while revenue slipped 69% to US$226.23 million from US$729.16 million.
The larger loss came as GEN HK's operations were adversely affected by the effects of Covid-19 that caused the group to cancel many sailings and temporarily suspend almost all of its cruise operations since February and shipyard operations since March.
Shares in GEN HK slipped 1.5 Hong Kong cents or 4.69% to 30 Hong Kong cents, valuing the company at HK$2.59 billion. Over the past year, GEN HK has fallen by 68%.
Edited by S Kanagaraju