Isramco Bids to Purchase Luxury Cruise Liner

Tuesday, March 23, 2004
Isramco, Inc., bid for a luxury cruise liner at an auction held on March 19 under order of the United States Bankruptcy Court, Southern District of Florida. The Court entered an order on March 19, 2004 authorizing the sale to the Company of the cruise liner, on an as is basis and free and clear of all liens and claims, for a purchase price of $8,050,000. The Company is required to consummate the purchase of the vessel by March 29. The vessel, a Bahamas flagged ship, contains 270 passenger cabins spread out over nine decks. The vessel was built in France in 1973 and was purchased in 1999 by Alberta Trading Company, the debtor-in-possession. The vessel was converted into a luxury cruise liner from a passenger/car ferry in 2000 at a cost of approximately $18.5 million and, up until January 2004, has been used as a luxury cruise liner. The company intends to pay the purchase price from a combination of internal working capital and the proceeds of a commercial loan. The Company and a commercial bank have reached a non-binding agreement-in-principle for a five-year loan of approximately $5 million, to be secured by a lien on the vessel and a corporate guarantee of the Company. Additionally, the Company estimates that it will need to expend an additional $750,000 for dry-docking, repairs and related costs. The Company is currently in discussions with several luxury cruise operators for the purpose of commercially leasing the vessel. No assurance can be given that the Company will be able to conclude any leasing arrangement on commercially acceptable terms.
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