THE receivers of the collapsed Island Escape Cruises have confirmed the sale of the line’s 32-passenger Island Escape newbuild for just US$5.5 million, under orders made by the Federal Court of Australia subsequent to the ship’s arrest in Broome last year (CW 25 Aug 2022). The buyer is understood to...
THE receivers of the collapsed Island Escape Cruises have confirmed the sale of the line’s 32-passenger Island Escape newbuild for just US$5.5 million, under orders made by the Federal Court of Australia subsequent to the ship’s arrest in Broome last year (CW 25 Aug 2022).
The buyer is understood to be associated with the Paspaley Group, which took the vessel over in Feb this year, according to the ABC, although the proceeds are yet to be distributed by the Federal Court, according to the most recent report to creditors.
While significantly less than the cost of similar vessels, Federal Court judge James Feutrill noted that Island Escape’s condition has deteriorated, while the vessel has “some unusual features that render the pool of potential buyers limited, and it is difficult to accurately estimate the value of the ship”.
Liquidators from New Zealand-based accounting firm Chapman Atkins confirmed the sale has left a significant shortfall to secured creditors, with the Island Escape group owing $11.8 million to Export Finance Norway and another $8.5 million to the Bank of New Zealand.
Island Escape’s most recent balance sheet recorded almost $1 million in unsecured trade creditors and $1.7 million in customer deposits.
Forward bookings amounted to $1.5 million for New Zealand cruises, and $4.7 million for Australian departures, the liquidators said.
“Subject to further verification, given the shortfall to the financiers, there will be no distribution to unsecured creditors, including cruise ship customers of the company,” the report noted.
Trade creditors include several Kimberley- and NZ-based suppliers, as well as APT-owned Captain’s Choice, which had planned a charter of the vessel.
Tour operator World Journeys and shore excursion providers Fjordland Tours and Southern Lakes Helicopters are also owed money, as are more than 100 individual customers, who are listed as unsecured creditors.
Island Escape ceased trading just weeks after Chief Executive Officer Erik Helseth assured Cruise Weekly guests booked on a series of abruptly cancelled Kimberley departures would receive full refunds (CW 21 Jul 2022).
Island Escape was delivered by Norway’s VARD shipyard in Oct 2021 and started sailing in Jan 2022, just eight months before the cruise line’s collapse.
