CIN has learned that Windstar Sail Cruises Limited is seeking additional funds for operating capital.
The company has invited Scandinavian banks and institutional investors to participate in an issue of a $5 million loan, with attached shares equivalent to a 20 percent ownership in the cruise line. The five-year loan is said to carry an interest of 10 percent per year, and will be secured by a second mortgage on the two cruise ships under construction at Societe Nouvelle des Ateliers et Chantiers du Havre.
According to the line, by conservative estimates the shares should be valued at $6 million after five years, giving investors a combined yield of 25 percent.
The offer is underwritten by DNC Capital Corporation of New York, Norwegian Jotunfinans A/S, and Den Norske Creditbank. It is not being offered in the United States or to U.S. citizens. The closing date is March 10, 1986.
Windstar Sail Cruises is a Bahamian company, wholly-owned by Taconic Holdings, Inc. Taconic is owned by Karl G. Andren (New York), and the Norwegian shipping family, Stolt-Nielsen (Connecticut). Its main operations are the Circle Line and Day Line in New York City.
Windstar has been financed by Taconic at the rate of $6 million, plus additional financial guarantees. The French provided 90 percent financing over 10 years, for the two ships, at a price of $24.2 million per ship.
The line plans to expand the Windstar fleet to six to eight vessels at a later stage. The Norwegian firm of WILH. Wilheimsen has been engaged to manage ship operations, and oversee the construction of the vessels. Wilheimsen also manages Sea Goddess' marine operations.
Poseidon Maritime Services - servicers of RCCL and several other lines - has been contracted to manage the hotel and restaurant operations.
Windstar Sail Cruises has identified a potential cruise market of 3.5 million Americans, but is targeting its efforts to a very defined market of 1.5 million, who are under 35, with annual incomes exceeding $35,000. Its breakeven point is reported to be at 9,800 passengers per year.
The line's marketing efforts will be concentrated in the larger metropolitan areas of the United States, and carefully selected travel agents. To date, the line is claiming a surprisingly strong interest from travel agents, and reports that the incentive business is also showing a good deal of promise. Major upscale tour operators and highly specialized retailers are showing a good deal of interest, as well, according to the line.
Windstar Sail Cruises will offer seven-day sailings in the Caribbean during the winter, and in the Mediterranean or South Pacific Islands during the summer. The average price per day will be between $300 and $350, including airfare.
The first ship is due for delivery in October, 1986, and the second is due in April, 1987. Operations are scheduled to begin in December, 1986.