Cruise ship sale up on appeal
Jan 19, 2004
An urgent application will be heard in the Durban High Court later today (Monday) asking for the sale order against the arrested cruise ship Olympia Countess be set aside or postponed. The application is being brought on behalf of a Turkish creditor who was among those who had the popular ship arrested on January 8, resulting in over 11,000 South African holidaymakers having to cancel their holidays.
In papers before the court fears are expressed that a hurried sale, set for Thursday next week (29 January) will attract far less participants because of the short notice period. As a result the true value of the ship may not be realised, to the detriment of all creditors including the crew of 290 who are still on board and who have not been paid for several months.
The court is being asked to either set aside the auction sale or postpone it until at least 25 February in order that as many interested parties as possible can take part. It is feared that a rushed sale will bring only the scrap value of the ship worth USD3 million.
According to a London firm of shipbrokers, Galbraith Ship Brokers, the ship’s true value is between USD15m and USD18million.
In terms of the sale order the ship will be sold free of lien and encumbrances, meaning that whoever buys it will be able to sail from Durban free of any claims against the present owners or associated vessels. Creditors will have the proceeds of the sale distributed amongst them. Total claims exceed the estimated true value of the ship.
A new owner would also be in a position to re-charter the ship to Starlight Cruises for the remainder of the current South African cruise season and later return Olympia Countess to the Northern Hemisphere at the start of the European summer.
The present owners, Royal Olympic Cruises, also have a contract to provide four cruise ships, of which Olympia Countess is one, as floating hotels during the forthcoming Olympic Games. As things stand there is nothing to stop them registering a new company and participating in the auction in the hopes of purchasing the ship for its scrap value, free of liens and encumbrances, and honouring existing charters.
According to Mr Alan Foggitt of Starlight Cruises, the owners have given assurances that the ship will be able to continue cruising from Durban by February 13, two weeks after the sale.
In a related matter, Royal Olympic Cruises (ROC) has agreed to allow the banks to sell two cruise ships that have been idle in US waters for several weeks. The cruise by the Olympia Voyager, that was due to begin today (19 January) from Fort Lauderdale, has been cancelled. The second ship, Olympia Voyager is berthed at Los Angeles. The separate companies that own the ships have each filed for Chapter 11 bankruptcy protection (judicial management).
The chief executive of ROC, Yiannos Pantazis has resigned from the company but will remain on the board, it was announced on Friday, with Leonidas Xanthakos assuming the role of CEO.