Regency Takeover

Antonios Lelakis is heading up a group that in the name of Rainbow Cruises has acquired 32.2 percent of the outstanding stock of Regency Cruises for which the group has paid about $10.2 million.

Lelakis is President of Rainbow as well as the founder and owner of Starlite Cruises, which is set to launch one-day service out of San Diego this fall. Joining Lelakis are Peter Stamoulis, President of Coral Cruise Lines, which is responsible for the technical management of the Regent Sun, and Costas Galetakis, a director of Regency Cruises.

Coral is affiliated with Ridan Investment Trust Inc., which owned the Regent Sea until last December when she was sold to a newly formed Panamanian Corporation called Lujo Cruises, and chartered back to Ridan, and World Pioneer, which owns the Regent Star.

In Regency Cruises' annual report for 1989, it was stated that Galetakis had been an officer of one or more of these companies and that the companies may be "deemed to be under common control with one another." Both companies are reportedly owned by Lelakis.

Under the charter agreement, the owner is responsible for deck and engine crew, hull and machinery insurance, and for technical maintenance. The charterer is responsible for hotel operations, bunkering and provisioning and all other cruise related expenses.

The charter of the 712-passenger Regent Sea, which began in 1985 for the 33-year old ship, stipulates total payments of about $57 million for the remaining of the charter.

The charter of the 952-passenger Regent Star, which also was built in 1957, is also for a ten year period, starting in 1987. Remaining payments are $89.7 million in charter fees. Total charter payments for the two vessels are estimated to be around $225 million. In 1987, Regency purchased the 838-passenger Royal Odyssey, which was built in 1964, for $22 million.

Rainbow Seeks Active Role

The group said it wanted to play an active role in the management of Regency cruises and that it may seek representation on the board of directors.

The group acquired shares in open market purchases and through negotiated transactions at prices ranging from $1.81 to $2.10. Den Norske Bank PLC provided the financing in the form of a $12 million loan. At press time, Regency's shares traded at about $2.

With 32.2 percent of Regency's outstanding shares being acquired for $10.2 million, the cruise line is valued at about $30 million.

Other Developments

Lelakis recently took delivery of a hull section from Poland's Gdansk shipyard that is to be converted into a 1,400- to 1,600-passenger cruise vessel in his Avlis shipyard in Greece at an estimated cost of about $180 million. Early last month, the project was already dubbed the Regent Sky. Construction is estimated to take two years.

With Lelakis' involvement and with the anticipated addition of one more vessel to the Regency fleet, it is speculated that Regency may establish year-round West Coast operations, pending the successful operations of Starlite Cruises, and that at least one Regency vessel may be repositioned to Europe during the summer months. That in turn would leave two vessels in Alaska in the summer and one in the Caribbean, and three vessels in the Caribbean during the winter season.

In the meantime, Jack Chatman, Executive Vice President, recently left Regency, and it is rumored that William Schanz, President, may also be leaving.

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