The historic Delta Queen will soon have another set of new owners, this time through the bankruptcy of its parent company nearly a decade after another former owner also filed for Chapter 11.
Ambassadors International Inc., Seattle, announced on April 1 that it was selling its Windstar Cruises operating unit and assets of its money-losing Majestic America Line brand in a transaction supervised by U.S. Bankruptcy Court in Delaware. The buyer is Whippoorwill Associates Inc., White Plains, N.Y., a private investment firm with more than $1 billion under management and a 22 percent stake in Seattle-based Ambassadors.
Whippoorwill has agreed to provide $10 million in new financing under a debtor-in-possession credit arrangement, the companies said. The sale is expected to be finalized within 45 days. Ambassadors listed $86.4 million in assets and $87.3 million in debt.
Windstar intends to continue operating cruises on its three-ship fleet with court approval, Ambassadors said. The deal also includes the Delta Queen and the Columbia Queen, which Ambassadors operated under the Majestic label that was discontinued in 2008.
The Delta Queen is leased under a bareboat charter as a hotel in Chattanooga, Tenn. The Columbia Queen, which is currently in Portland, Ore., was pledged as collateral with a credit card processor, Ambassadors said in regulatory filings.
“Both will continue to be marketed for sale,” said Ambassadors spokesman Vanessa Bloy.
The Maritime Administration is trying to sell two other Majestic vessels, the American Queen and the Empress of the North. Ambassadors turned them back to Marad, which paid bondholders nearly $68 million. Marad is among the top five creditors in the bankruptcy filing, with nearly $14 million in judgment debts tied to Title XI financing for the American Queen. Wells Fargo Bank, with $31.7 million owed, is the largest unsecured creditor.
Friday’s announcement focused primarily on the future for Windstar, which operates in Europe, the Caribbean and the Americas. “Once it is free of its debt burden, we are confident Windstar will be poised to grow its market share over the long term,” Whippoorwill president Shelley Greenhaus said in a prepared statement.
Ambassadors formed Majestic America Line in 2006, combining several U.S.-flagged cruise companies and vessels. They bought the Delta Queen, the Mississippi Queen and the American Queen from Delaware North Companies, a Buffalo, N.Y.-based company that picked up the three vessels at auction in May 2002. Before that, the boats belonged to American Classic Voyages Inc., which filed for bankruptcy in October 2001.