Crystal Cruises closes and lays off US staff
Late in the day, an unconfirmed report surfaced stating that US-based Crystal Cruises, which was a marketing company and brand for Genting Hong Kong, will officially close its doors on Wednesday, February 8. The banks which act as receivers for the ships and are reportedly appointed V.Ships last night to manage the cruise ships, which have also reportedly been offered for sale.
The demise of Crystal Cruises had been rumored since the financial collapse last month of Genting Hong Kong, its parent company. Genting Hong Kong bought the brand in 2016 in a deal valued at $550 million with plans to expand it into a wide-ranging luxury operation ranging from ocean cruises to private jet charters, a jet 777-200 for air tours, residences at sea, expedition and river cruising. The report of the US office closure comes from a recorded message, presumably from the captain, sent by crew members to the Crew Center website. Although the sound quality is poor, it is clear that the speaking officer has little information but seems discouraged when announcing the disappearance of the mark.
The Crystal Cruises office in the United States is closing. V.Ships will take over as the ship management company. Unfortunately, this is the end of Crystal Cruises. pic.twitter.com/7IUdp6GSd6
– Crew Center (@CrewCenter) February 8, 2022
Reports circulating in the industry indicate that the cruise line’s secured creditors, various banks holding mortgages on the cruise ships, acted to protect their interests by taking control of the ships. Earlier, fuel supplier Peninsula Petroleum obtained a Miami court order to stop the crystal symphony on unpaid December and January fuel bills for the company’s two cruise ships. Rumors indicated that it was, however, other creditors who succeeded last Friday in having the Bahamian authorities seize the Crystal Serenity and crystal symphony when they arrived in Freeport looking for fuel and provisions.
The Crystal Expedition cruise ship, the crystal effort, however, was cleared to sail after disembarking its passengers and is up to date at sea. The ship says it will arrive in Montevideo, Uruguay on February 10. It is unclear what will happen as German banks are the creditors of the ship which was completed in the summer of 2021 at MV Werften, Genting Hong Kong’s shipyard. The financial collapse of MV Werften in early January triggered the cross defaults that hit Genting Hong Kong and its Asian cruise brand Dream Cruises. The state of Mecklenburg-Vorpommerns, where the shipyard is headquartered in Germany, granted a bridging loan at the end of 2020 to restart operations in order to complete the crystal effort and resume work on the largest world dream cruise ship for Dream Cruises.
Crystal also marketed five river cruise ships in Europe, four of which were built by MV Werften, and the fifth was acquired and refurbished. These ships were in their normal winter armament and were to resume navigation in the spring.
Speculation has been that river vessels and the new expedition cruise ship will attract the most attention for possible resale. the crystal symphony was built in 1995 and although recently updated is considered older while the Crystal Serenity was introduced in 2003.
The two cruise ships disembarked their last passengers at Bimini in the Bahamas in January. The crew members, however, remain on board the ships and the expedition vessel, awaiting payment of their salaries and the company to arrange repatriation flights in accordance with their employment contracts. Last week, when the two cruise ships were detained, the captain said he expected approval to continue this week, but was awaiting word.
Crystal Cruises was conceived in the late 1980s as a premium cruise line in the emerging luxury segments of the cruise industry. Japanese company NYK financed the company in conjunction with a team of American executives led by Art Rodney, who was previously CEO of Princess Cruises. The company’s first ship was built in Japan and at 50,000 gross tons and carrying only 900 passengers defined what is today considered the premium segment of the cruise industry.
NYK viewed Crystal as a prestige brand investing in the business to maintain it as an award winner, while reports indicated it was often unprofitable. Original plans called for three sister ships, but they were never built with NYK adding the second ship in 1995 and the third ship only in 2003. The first ship was however sold in 2005 to NYK to become the Asuka II Japanese market cruising.
Earlier today, on February 8, Genting Hong Kong confirmed the appointment of provisional liquidators for Dream Cruises. They continue to say that the objective is to develop a restructuring of the financial debt of the group aimed at allowing Dream Cruises to continue its activity. The aim is to reach a settlement with Dream Cruises’ creditors through an arrangement that would allow the group to reduce its debt and continue to operate cruises in Asia.