Ambassadors further extends exchange for convertibles due 2027

New York, Nov. 4 - Ambassadors International, Inc. said it has again extended its exchange offer for its $97 million of 3.75% convertible senior notes due 2027.

The offer will now end at 5 p.m. ET on Nov. 12, delayed from 5 p.m. ET on Nov. 5 and previously midnight ET on Oct. 23.

As of Nov. 4, the company had received tenders for $66 million, or 68%, of the convertibles, unchanged from the previous announcement on Oct. 23.

As part of that earlier announcement, Ambassadors also said that the three holders of the convertibles that entered into a commitment and support agreement have nominated a director. They are Eugene I. Davis, Stephen P. McCall and John Bianco.

If the exchange is completed and at least 58% of the convertibles are tendered, Ambassadors has agreed to hold a special meeting of its board of directors within two business days of the completion of the exchange at which the three nominees will be elected.

As announced on Sept. 25 when the exchange was launched, for each $1,000 principal amount of the existing notes, it is offering 230.3766 shares of common stock and $273.1959 principal amount of 10% senior secured notes due 2012.

If all $97 million of notes are tendered, the company will issue 22.3 million new shares, or 66.67% of its stock, and $26.5 million of new notes. Outstanding debt will be cut by $70.5 million.

Holders of 59.5% of the existing notes have entered into commitment and support agreements under which they will tender into the exchange.

The new notes will pay interest in kind or in cash, at Ambassadors' option.

Ambassadors is also soliciting consents to remove certain covenants and make other amendments to the convertibles indenture.

The changes require the consent of holders of a majority of the notes.

The company said it is carrying out the exchange in order to reduce its debt and lower its annual cash interest expense. It noted that it continues to execute the plan announced in February to focus its capital and efforts on Windstar Cruises and the small ship luxury segment.

Ambassadors has sold the housing portion of its travel and events division and its marine group and recently entered into agreements to dispose of its CypressReinsurance business and sell the vessel Queen of the West to Blue Spruce LLC, an affiliate of American Cruise Lines.

Globic Advisors is information agent for the exchange (212 227-9699).

Ambassadors is a Seattle-based cruise company.

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