A luxury cruise ship that was operating in the Kimberley has been sold to pay back creditors, but the $4 million owed to unpaid customers will likely not be returned.
Island Escape Cruisers NZ left dozens of passengers out of pocket after cancelling voyages when the company went into receivership and shortly after, the vessel was seized at Broome Port.
It is believed the 53.5-metre luxury vessel was sold to the Paspaley Pearl family for $5.5 million on January 13 – significantly less than the estimated value.
The sale was conducted by the Federal Court in hopes to pay back international creditors and the Bank of New Zealand and Export Finance Norway.
But the undersell means that guests like Mr. Davies and his wife will not get their refund.
Liquidators Rowan and John Chapman and Amanda-Jane Limited were appointed to oversee the company’s finances and the latest reports outlined the debt to be paid after the sale.
“Subject to confirmation, as at the date of the liquidation, the group owed approximately $20.3 million in total to the financiers,” the report reads.
“An amount of $11,851,080 is owed to Export Finance Norway, and approximately $8.5 million is owed to the Bank of New Zealand.
“Due to the sale price of the vessel, there will be a shortfall to the financiers.”
A similar luxury cruise ship has been on the international market for around $35 million but the creditors found the Island Escape was not in good condition, impacting the prospect of the sale.
“The ship has some unusual features that render the pool of potential buyers limited and it is difficult to accurately estimate the value of the ship,” said Federal Court judge James Feutrill who had ordered the sale.
“I am not satisfied that any alternative process is likely to produce a higher sale price for the ship or a higher overall return, after taking into account continuing costs of the arrest and additional costs of an alternative sale process, than the current highest tender.
“I am satisfied that an order should be made directing the marshal to accept the highest tender.”
The latest accounts as of May 31, the sum of pre-booked trips in Australia was $4,677,217.
Liquidators concluded a refund to customers would be unlikely.
“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 reads.
Mr Davies and his wife had planned to take the trip to the Kimberley when they were older and international travel had become more difficult.
He told the ABC he had been diagnosed with cancer since making the booking but he hopes that he will be able to see the Kimberley with another reputable company.
Quest Maritime Services executive director Shane Male, who is heavily involved in Broome’s marine industry said he was contacted by customers to find out what happened with their cancelled voyages.
“They were all incredibly frustrated and disappointed, and really wanting to know why,” he said.
“These people have had to come down to the wharf and then find that the boat’s not even there and nobody’s answering the phone, so they were quite distraught.”
