Ambassadors International seeks approval of DIP loan, bid procedures for $40 million asset sale

By Jennifer Lanning Drey

Savannah, Ga., April 4 - Ambassadors International, Inc. requested court approval to obtain $10 million of debtor-in-possession financing from Whippoorwill Associates, Inc., according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

The company is seeking interim access to $5 million of the facility.

The DIP facility amends and restates the company's prior working capital facility with Whippoorwill, according to the filing.

The DIP facility will mature on the earliest of 120 days from the petition date, 25 days from the bankruptcy filing if a final order has not been entered and termination in accordance with the credit agreement.

Interest on the DIP loan will be 12%, which is the same rate included in the pre-bankruptcy credit agreement, according to the filing.

Ambassadors will pay a $200,000 commitment fee.

The company's ability to obtain loans under the facility will be subject to its compliance with milestones related to the sale of substantially all of its assets.

As previously reported, Ambassadors filed for Chapter 11 bankruptcy to carry out the sale of substantially all of its assets to Whippoorwill.

Bid procedures filed

Accordingly, Ambassadors also filed a motion on Monday seeking approval of the bidding procedures related to the $40 million sale of substantially all of its assets.

The stalking horse bidder is a newly created designee of Whippoorwill.

The $40 million purchase price will be payable in the form of assumed credit agreement obligations, a credit bid of at least $19 million and other assumed liabilities.

Ambassadors said it has also been aggressively marketing its assets to potential third-party purchasers and has approached more than 60 parties.

There are currently no alternative bids.

Competing bids are due by 4 p.m. ET on April 29 and must be for at least $100,000 more than the Whippoorwill offer.

Ambassadors said it is looking to close the sale within 40 days.

The company has requested the hearing on the bid procedures be held on April 13 and the sale hearing on May 6.

Ambassadors, a Seattle-based cruise company, filed for bankruptcy on April 1. The Chapter 11 case number is 11-11002.

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