With no viable buyers for Majestic America Line or for the line’s individual ships, Ambassadors International is looking to wind down its American river cruise business and put the fleet’s seven ships into extended drydock, the company said in a conference call to discuss third-quarter financial results.
Nevertheless, Ambassadors said it does not plan on filing bankruptcy for Majestic.
“I do not perceive a sale of Majestic American Line as an entity,” said Joe Ueberroth, Ambassadors CEO. “There is some severe interest in our vessels, but the interest is on a vessel-by-vessel basis. When asked about the potential of the sale in the immediate future, I am obviously concerned due to current economic conditions, the state of our financial markets and the lack of available financing.”
Under the Majestic America brand, the Empress of the North concluded operating on Aug. 9, and the Columbia Queen made its final sailing on Oct. 25. The Delta Queen’s season concludes on Oct. 31, and the American Queen and Queen of the West will complete their seasons on Nov. 15 and 16, respectively.
“In hindsight … I acknowledge that no matter how well structured or how little capital was required, our investment in the domestic river cruise business was a very bad investment. We flat got it wrong,” Ueberroth said.
On Sept. 25, Ueberroth announced his resignation and said that his last day will be Sept. 19, 2009.
Looking ahead, Ueberroth said the company will look to preserve cash and help Ambassadors’ three remaining businesses survive through the tough times ahead. All options will be explored, said Ueberroth, including selling parts of the company.
“I believe that there could be a significant benefit to the company if we have leverage or monetize our business or some assets,” Ueberroth said.
The three remaining business are luxury cruise line Windstar, a marine management business and a travel and events division.
Ambassadors reported third-quarter revenue of $83.5 million for the three months ended Sept. 30, a 14% decline from $95.4 million from the same period one year ago. The company reported net income of $9.6 million, compared with $382,000 a year ago.
Cruise revenue decreased $5.7 million ($4 million for Majestic America Line and $1.7 million for Windstar) as a result of lower occupancy and fewer operating days.
Ambassadors noted that Windstar’s Wind Surf yacht will likely undergo a $3 million to $5 million refurbishment in the first quarter of 2009.