Windstar Cruises in Chapter 11
Written by: Paul Motter
Windstar Cruises is a well-known name in cruise circles, but one which has seen better times. Just last Friday the parent company to Windstar Cruises, Ambassador’s International, announced it is filing for Chapter 11 Bankruptcy protection, which means a reorganization of its financial assets. The company will continue sailing on its announced itineraries, which can be purchased through travel agents or directly from the company.
Starting on Wednesday of last week the shares in the stock of the company that owns Windstar, Ambassador’s International, almost tripled in value on rumors that Windstar was to be sold to a private equity firm, but on Friday the company decided to announce the cruise line is being sold but that Ambassador’s International is also filing for chapter 11 bankruptcy. Trading in the stock was immediately halted.
On Friday all of the assets of Ambassador’s International were sold to the Whippoorwill Management, a private equity firm located in White Plains, New York. Ambassadors and Windstar plan to continue normal business operations for Windstar during the sale process, which should be completed in about 45 days.
Whippoorwill plans to maintain Windstar’s business and operations and as well as invest in Windstar’s growth following the completion of the 45-day sale period.
Windstar Cruises History
Windstar was created in 1984 by a small French company, the first ship being called Wind Star. She is a beautiful sail ship with four masts for sails. The ships can move under wind power alone, but rely upon their engines well over 90% of the time. But when the sails come out – generally as the ship is leaving a well-populated port – the effect is like a peacock showing its tail. You can miss the grand spectacle of one of the largest sail ships ever built dressed in her full glory.
Windstar Cruises now has three ships – two of the smaller 150-passenger vessels, Wind Surf and Wind Spirit, and one larger ship, the Wind Surf, which was built in the same French ship yard and looks very similar to the smaller ships, but has a capacity of 300 passengers.
Windstar Cruises was acquired by Holland America in 1987 back the HAL was still an independent company. At the time, Windstar ships were considered the height of luxury with their small passenger loads, always casual dress codes and open seating dining. The small passenger loads made it very easy for the crewmembers to know the names of every passenger onboard by the end of the first day. Like most smaller ships it was very easy to meet new people on the ships and the Maitre D’ was always clever enough to watch who passengers were socializing with and seat them together at night.
Under the guidance of Holland America the line became extremely popular. Small ships with casual dress codes and open seating were a rarity in the 1980s and early ‘90s. Many people in the cruise industry, even if they worked for other cruise lines, secretly sailed on Windstar in the South Pacific for special occasions like honeymoons.
Even when Holland America was acquired by Carnival Corp. in 1988 (the deal included Windstar Cruises) the small cruise line remained popular, but in 2007 Carnival Corp. decided to divest Holland America of its little sister company, and Windstar was sold to California-based Ambassador’s International for $100 million. At the time, Ambassador’s International already owned the former ships of the Delta Queen Steamboat company , plus the Columbia Queen Steamboat and Bellingham Marine Operations.
The new owners of Windstar, Whippoorwill Associates of White Plains, NY, are not a well known investment company to the cruise industry, but the company says it plans 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, plans to maintain Windstar’s business and operations and has agreed to provide $10 million in new financing to Ambassador’s International under a Debtor-in-Possession credit facility, which can help to support Ambassadors’ and Windstar’s continuing operations during the sale process.
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 that were discontinued in 2008.
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Posted: April 3rd, 2011 under Paul Motter.