Sea Containers Sells Isle of Man Steam Packet

Thursday, July 17, 2003
Sea Containers has sold the Isle of Man Steam Packet Company to Montagu Private Equity Limited for $233 million, with effect on June 30, 2003. The profit on this transaction will be $100 million, however, the company has decided to establish provisions for the restructuring of its fast ferry business and to reduce the carrying value of certain assets to current market value. Total provisions will be approx. $40 million. The company also advised that its exchange offer of 13% senior notes due 2006 for July 1, 2003 matured 9.5% and 10.5% senior notes had been subscribed in the amount of $22.5 million. The balance of these senior notes ($136.6 million) has been repaid. James B Sherwood, President, said that the exchange offer for the company’s $99 million of 12.5% senior subordinated debentures due 2004 was still open and an announcement of the acceptances would be made when the offer expires (July 23, 2003 unless extended). The company is offering senior notes due 2009 in exchange for this subordinated debt, carrying the same interest rate of 12.5%. Sherwood said that the company expects soon to conclude the sale of its port interests in Folkestone and part of its port interests in Newhaven for £16 million ($26 million). It will retain the Newhaven Marina and property development site adjacent. He said that sale of the company’s Charleston container manufacturing facility now looks less likely in that offers received so far undervalue it. Its sale at this time is not necessary to meet the company’s obligations in light of the successful exchange offer for the July 1, 2003 matured notes.
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