Ambassadors said that the filings were made in accordance with an agreement to sell substantially all of its assets, including Windstar, to Whippoorwill Associates, Inc., as agent for its discretionary funds and accounts through a court-supervised sale process.
It said that Ambassadors and Windstar intend to continue normal business operations during the sale process, which is proposed to be completed in approximately 45 days. Windstar also plans, subject to court approval, to continue to:
- Operate all Windstar cruises as scheduled;
- Maintain all of Windstar's customer programs and policies;
- Honor all Windstar fares and reservations, including charter contracts;
- Provide commissions and payments to its travel partners as usual and employee wages and benefits without interruption; and
- Pay all Windstar vendors and suppliers for goods and services received both before and during the reorganization process in connection with the sale.
Whippoorwill, a private investment firm with over $1 billion under management, intends to maintain Windstar's business and operations and invest in Windstar's growth following completion of the anticipated sale.
Shelley F. Greenhaus, President of Whippoorwill, said "Windstar is a leading brand in the small ship luxury travel market. Windstar's unique vessels and itineraries offer a one of a kind cruise experience. In its short tenure, the existing management team has made significant strides in transforming Windstar's operations. The various initiatives implemented in the past year have started to turn the business around. 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 has agreed to provide $10 million in new financing under a Debtor-in-Possession (DIP) credit facility, which can be used to help support Ambassadors' and Windstar's continuing operations during the sale process. With its current cash availability and this additional funding, Ambassadors says it believes that it has ample liquidity to meet its obligations to Windstar's customers, suppliers and employees without interruption while the sale is being completed. Upon emergence from this process, Windstar will be financially stronger with substantially less debt and greater financial resources to support its future growth.
Hans Birkholz, CEO of Ambassadors and Windstar, said, "We are pleased to have reached this agreement with Whippoorwill, and are confident Windstar will have a bright future ahead. Whippoorwill has been a strong supporter of the business for the past two years and we look forward to continuing this partnership."
"Windstar has earned its reputation as a world-class brand by providing affordable luxury vacations with attentive service staff and outstanding amenities on each of our vessels -- and we intend to continue delivering on that commitment. Our customers and guests remain our top priority. The actions we are announcing today will allow us to build on our strong brand position and guest experience delivery while we position Windstar for profitability and long-term success. Going forward, Windstar will continue providing the extraordinary experiences and exceptional service that are its hallmarks," Birkholz concluded.
In addition to the ongoing Windstar operations, and as part of the sale, Whippoorwill will also acquire certain assets of Ambassadors' former Majestic America Line operations, which were discontinued in 2008.
Under the terms of the agreement, the sale to Whippoorwill is subject to court approval and other specified closing conditions. In compliance with Section 363 of the U.S. Bankruptcy Code, qualifying bidders will also have an opportunity to submit higher and better offers for evaluation through a court-supervised competitive bidding process.
It is expected that Ambassadors' stockholders and holders of Ambassadors' convertible notes will not receive any distribution following the sale and these securities will likely have little, if any, value following the Chapter 11 proceeding.
The Company's legal advisor is Stroock & Stroock & Lavan LLP and its financial advisor is Imperial Capital, LLC. Whippoorwill's legal advisor is Gibson, Dunn & Crutcher LLP.
April 4, 2011