FESTIVAL is in US FIRST EUROPEAN.

Please note and be careful with Bookings.

Last night, Festival´s three newbuildings MISTRAL, EUROPEAN VISION and EUROPEAN STARS were arrested due to pending debts not settled.

The MISTRAL (built in 1999) was arrested in Marseilles, the EUROPEAN VISION (built 2001) in Santo Domingo and the EUROPEAN STARS (2002) in Barcelona. Passengers were reportedly disembarked from the ships, which were all built by French yard Alstom Chantiers de l´Atlantique.

According to the information, which comes from a reliable source outside the Greek-Italian cruise line, a creditor was not reimbursed for its bonds, expiring on 31 December last year. The Italian state-owned bank S.Paolo has been mentioned in connection with this information.

CFI understands that Festival owns the MISTRAL while Alstom is the owner of the other two vessels, chartered to Festival.

Festival´s Genoa headquarter confirmed on Monday that MISTRAL and EUROPEAN STARS - but not the EUROPEAN VISION - had been arrested. The headquarter added that the situation was expected to return to normality within 24 to 48 hours, and that passengers should be re-embarked promptly.

Festival says the dispute is just between them and the owners of the two ships, Alstom, and strongly denied that a third part, such as a bank, was involved.

January 19 th 2004


Jammed three ships of Festival Cruises

Alstom, that has built the three unities granting a financing to the buyer, accusation the cruise company not to have respected the contractual terms

Two of the five ships that the fleet of Festival constitutes Cruises have been jammed in the harbors in which you/they have made subsequently port to a legal action undertaken by the French industrial group Alstom, that the two unities have built in the shipyard Chantiers de the Atlantique yesterday. You Mistral and the European Stars have respectively been stopped in the I bring of Marseille and in the I bring of Barcelona. A third ship of Festival currently in navigation, the European Vision, also it built by Chantiers de the Atlantique, will be stopped when it will touch Saint Domingo.

Today Alstom has remembered to have used in the past the practice of the vendor financing, especially in the sector of the naval construction, with a general exposure of 650 million of European to last September 30. The financings lavished to the buyers of the ships include those granted to the Festival for the construction of the Mistral (1999), of the European Vision (2001) and of the European Stars (2002).

Alstom has accused Festival of «not to have respected the contractual terms» and you/he/she has decided therefore to start actions for the block of the ships and for the cessation of the accords of rental with the company. «Supposing that the value of the three ships both equal to zero - you/he/she has specified the French group - the exposure of Alstom towards Festival is of 176 million of European. Making reference to a prudential respect related to the value of sale of the ships, Alstom it believes that his/her direct and indirect affairs in the ships (100% on Mistral, 9,5% on European Vision and 10,5% on European Stars) adequately covers this exposure. Insofar Alstom doesn't intend to enroll a passivity regarding the actual disposition of vendor financing for 140 million of European with Festival. Alstom doesn't offer tools of vendor anymore financing».



ALSTOM's exposure
(Source: Alstom)

ALSTOM
exposure
Ships
value as
sold
Ships
market
value (1)
Market value
of ALSTOM
guarantees

European Vision (2)
22
270
180/215
17/20

European Stars (3)
24
270
180/215
19/22

Mistral (4)
100
244
138/165
138/165

Repossession costs
25

Festival shares (5)
5

Total
176
784
498/595
174/207


(1) Estimated market value (for cruise mass market) for berth: 150,000/180,000 $
(2) ALSTOM expects to recover 9.5% made her proceeds
(3) ALSTOM expects to recover 10.5% made her proceeds
(4) ALSTOM expects to recover 100% made her proceeds
(5) Subscription by ship owner of shares in Festival guaranteed by ALSTOM




Update on vendor financing
In September 2003 accountses ALSTOM disclosed
its total vendor financing exposure as follows:

(in € million)

Total Vendor Financing
969

Of which Marina vendor financing
650

Renaissance ships
344

Others Marine including Festival
306


The provision retained in respect of
Sea vendor financing is €140 million.


January 19 th 2004


Festival Cruises: «in the way of immediate resolution» the problem list with Alstom/Crédit Agricole

«The dispute, of general character - has specified the company - it will have positive conclusion within 24/48 hours»

Festival Cruises it announces that I am «in the street of immediate resolution the problem list between Alstom/Crédit Agricole and Festival Cruises that the delay has respectively provoked in the departure of the ships European Stars and Mistral from the harbors of Barcelona and Marseilles» (to inform about January 19 th 2004). «it disputes her, of general character - has specified today the company - it will have positive conclusion within 24/48 hours».

Festival Cruises has underlined besides that the block is not anticipated to Saint Domingo of the ship European Vision and that «they are not anticipated variations in the normal planning of the next cruises».

Thanks for the report Patrick.. it seems a bit confusing at this stage, as to who owns & who owes what to whom.

But I can see if Alstom is owed money from the end of Dec, in their present state, they are not going to give [or be able to] any leeway and will act quickly.
Could this be the case? A bank mentioned may only be the intermediator for collection or may have lent monies against those bonds for which payment is late?

There are so many different scenarios one can dream up on this... pure specualtion.

But I can undersatnd Alstom's position. Crédit Agricole want their money from Alstom & Festival Cruises owes it to them. Festival, I hope have been under negotiation elswhere to refince their credit with Alstom.

quote:

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Originally posted by rd77:
I hope Festival gets to keep the ships and survives. We need more diversity, not less!!

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There's no hope of that ...the ships have already found new homes.

Isn't Festival also owning the CARIBE (the ex STOCKHOLM, that sank ANDREA DORIA)?
Bereft of MISTRAL, EUROPEAN STARS and EUROPEAN VISION, this vessel may attributed as the best ship in their fleet, as it was totally rebuilt in 1992. Reportedly she is very upmarket inside!

quote:

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Originally posted by Johan C:
can you be a little more specific Tim?

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Not at the moment.

I think she will find a new home if Festival goes under totally! As Valtur the company that owns her will definentley find her a new home!

quote:

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Originally posted by Keitaro:
Is there even hope for Festival once their newbuilds are gone? I wonder which company took them....

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Without their newbuilds, they might be able to limp along. As for the newbuilds themselves, they'll end up in good, but seperate hands.

quote:

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Tim in 'Lauderdale posted:
As for the newbuilds themselves, they'll end up in good, but seperate hands.

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AFAICs.. I don't think MSC would want or need another ship so soon. Too big for Olsen [imo]; P&O appear over saturated. Would OV be looking for another? Thomson have Noordam coming, the ships are not their style anyway; SCL have SC coming & Crown to Phoenix; Airtours don't come into it.
Aida? maybe, but somehow I don't think so.
TMR? would they consider having one of these ships instead of chartering an ex R? But they would have to sail all year, rather than seasonally.

There all also the Twins up for grabs, 5 'new' ships available. Any new companies on the horizon?
Personally I hope they don't go to Carnival [other than as an Aida] or RCI or any US based company.
There are enough 'Little Americas' floating about Europe. I think a European owner is called for and that they continue to be run in the main for Europeans.

quote:

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I don't think MSC would want or need another ship so soon. Too big for Olsen [imo]; P&O appear over saturated. Would OV be looking for another? Thomson have Noordam coming, the ships are not their style anyway; SCL have SC coming & Crown to Phoenix; Airtours don't come into it.
Aida? maybe, but somehow I don't think so.
TMR? would they consider having one of these ships instead of chartering an ex R? But they would have to sail all year, rather than seasonally.

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What about Star Cruises/NCL?