Ambassadors International, parent of Windstar Cruises, missed a $1.8 million interest payment and reiterated warnings that it needs to sell assets, raise additional financing or renegotiate debt. In a delayed 10-K filed with the SEC on April 15, the company said it is in discussions with potential buyers and other prospects for additional funds, but has no commitments. “If we are not able to sell our non-Windstar Cruises assets, raise additional financing and/or renegotiate existing debt obligations in order to raise funds for operations, we will be forced to extend payment terms with vendors where possible, and/or to suspend or curtail certain of our planned operations and possibly seek protection in bankruptcy,” the company said. “Any of these actions would harm our business, results of operations and future prospects could cause our debt-obligations to be accelerated and could result in potential damages on existing contracts within our marine and travel and events businesses.”

The scheduled $1.8 million interest payment was due on April 15 on its 3.75 percent senior convertible notes. The company said it has until May 15 to cure this default. “Although there can be no assurances that we will satisfy the scheduled interest obligation prior to May 15, 2009, it is our current intent to cure the default prior to that date,” the company said. As foreshadowed earlier this month, the company again said, “If we are not successful at a combination of selling our non-Windstar Cruises assets, raising additional financing and/or renegotiating existing debt obligations in order to raise funds for operations, we may not be able to continue as a going concern.”

The filing later said: “If we cease to continue as a going concern, due to lack of available capital or otherwise, you may lose your entire investment in our company. Ambassadors previously operated Majestic America Line, a river cruise company formed by acquiring Delta Queen Steamboat Company, American West Steamboat Company and a few other vessels. It no longer operates those companies. “Due to the current global downturn in the economy, specifically the decrease in vacationers’ discretionary spending and the direct impact this has on the reduction in cruise bookings, decrease in corporate spending on incentive programs and the tightening effect of the credit market on financing for construction projects, we will need additional sources of cash in the immediate future in order to fund operations in 2009,” Ambassadors said in the 10-K filing.

In addition, Ambassadors faces a possible delisting from the NASDAQ Global Select Market. NASDAQ rules require a minimum bid price of $1 per share for the company’s common stock, but it has fallen below that mark “and it may do so again in the future.” NASDAQ suspended the bid price requirement through July 19. However, if NASDAQ does not further extend this suspension and the stock price is below $1, Ambassador common stock could be delisted. Ambassadors also noted that a lawsuit filed by David Giersdorf, the former president of Ambassadors Cruise Group, remains active. Giersdorf filed the complaint on Feb. 26, 2008, alleging he was improperly terminated and claiming damages that appear to over $70 million. “We believe all of Mr. Giersdorf’s claims lack merit and will defend them vigorously, but are not able at this time to estimate the outcome of this proceeding,” the company said. For more information, visit www.ambassadors.com.
 

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