Ambassadors International, Cruise Operator, Files Bankruptcy
Ambassadors International Inc. (AMIE), operator of Windstar Cruises, sought bankruptcy protection to sell its assets after losing money in seven out of the last eight quarters.
The company listed $87.3 million in debt and $86.4 million in assets as of Dec. 1, 2010, in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware. Eleven affiliates also filed for bankruptcy
Ambassadors, based in Seattle, entered into an agreement to sell virtually all its assets to Whippoorwill Associates Inc. for $40 million and assumption of Windstar liabilities, according to a company statement issued today. The sale should take about 45 days and is subject to competitive bidding and court approval.
“It is expected that Ambassadors’ stockholders and holders of Ambassadors’ convertible notes won’t receive any distribution following the sale and these securities will likely have little, if any, value,” the company said in the statement.
The 30 largest unsecured creditors of Ambassadors and its affiliates are owed about $51.3 million, court papers show. Wells Fargo Bank NA, as the trustee for the holders of the 3.75 percent convertible notes which are likely to see little to no recovery, is the biggest with a claim of $31.7 million.
Whippoorwill, a private investment firm with more than $1 billion under management, has agreed to provide the company with $10 million in financing to support operations while the company seeks to complete the sale. Operations are expected to continue without interruption during and following the sale, Ambassadors said in the statement.
‘Unique Vessels’
“Windstar is a leading brand in the small ship luxury travel market” with “unique vessels and itineraries” that offer a “one-of-a-kind cruise experience,” Shelley F. Greenhaus, president of Whippoorwill, said in the statement. The White Plains, New York-based firm is Ambassadors’ largest shareholder, owning about 22.2 percent of the company’s equity.
Ambassadors operates the three-ship luxury yacht fleet of Windstar Cruises, which shuttles patrons to “the hidden harbors and secluded coves of the world’s most sought-after destinations,” according to the statement. The ships can carry 148 to 312 passengers to 50 nations throughout Europe, the Caribbean and the Americas.
“We are pleased to have reached this agreement with Whippoorwill, and are confident Windstar will have a bright future ahead,” Hans Birkholz, CEO of Ambassadors and Windstar, said in the statement.
Ambassadors, which closed yesterday at $2.80, fell 89 percent to 31 cents today in after-hours trading on the Nasdaq Stock Market.
The case is In re Ambassadors International Inc., 11-11002, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporters on this story: Michael Bathon in Wilmington, Delaware, at mbathon@bloomberg.net; Dawn McCarty in Wilmington, Delaware, at dmccarty@bloomberg.net
To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net
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