Olympia Voyager up for auction

Jason · March 8, 2004

Royal Olympia Cruises' Olympia Voyager is ordered sold, but three of the line's ships are allowed to continue operating.

BY INA PAIVA CORDLE

The beleaguered Royal Olympia Cruises' Olympia Voyager will be sold on the courthouse steps in Broward County as the cruise line continues to operate three other ships while a mediator tries to work out an agreement with creditors.

U.S. District Judge James Cohn ordered the vessel -- now anchored off Miami -- auctioned March 26. Net proceeds will go to creditors, primarily a group of German banks that are owed about $130 million.

A sister ship, Olympia Explorer, will be similarly sold on March 24 in Los Angeles by a California judge's order, said Michael T. Moore, attorney with Moore & Co., who represents the German banks.

Royal Olympia's subsidiaries that owned the ships filed for bankruptcy protection on Dec. 17 in Honolulu. The company and its creditors negotiated an agreement to turn over the ships for sale to pay off creditors, said James R. Lawrence, a spokesman for Royal Olympia.

Royal Olympia had paid about $175 million in 2000 and 2001 for each of the 836-passenger vessels. But travel demand in the company's market, primarily the Mediterranean, soon slumped with war and the threat of terrorism.

The Olympia Voyager, which had been docked at the Port of Miami-Dade for about a month, left the port Friday to anchor about 1 Ã‚Â½ miles from the port's entrance. The move was made to save money on dockage, Moore said.

According to Judge Cohn's order, the continuing costs of maintaining the vessel had been running at $750,000 a month.

The sale should be made promptly to avoid further decay and potential damage to the vessel and to avoid unnecessary expenses, he wrote.

Lawrence said he has no idea who might bid on the vessels in Miami and Los Angeles.

''We would hope someone with real money will show up and buy them,'' he said.

If no offers are made, the banks themselves will bid for the ships to protect their investment, he said.

Meanwhile, two additional ships were arrested by creditors, with one, Olympia Countess, sold in late January in South Africa, Lawrence said.

On Jan. 28, Royal Olympia's subsidiaries that owned the cruise line's other three ships also filed for bankruptcy protection in Greece.

This week, the Greek Maritime Court of Appeal in Piraeus appointed a mediator for six months to try to find a compromise with creditors, while allowing Royal Olympia's three ships to keep operating. The mediator may be extended for three additional months, the court ruled.

That means that the ships can sail in Europe, generating cash flow, Lawrence said.

''We're really pleased to be able to get this far,'' he said.