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California and the West

Cruise firm to buy Carnival unit

February 23, 2007|From Bloomberg News

Ambassadors International Inc., operator of seven cruise ships that mostly sail U.S. rivers, said Thursday that it had agreed to buy Carnival Corp.'s Windstar Cruises unit.

Windstar's three luxury vessels, with a combined capacity of 600 passengers, cruise the Mediterranean, Caribbean and Costa Rica, Newport Beach-based Ambassadors said.

Buying Windstar furthers Ambassadors' plan to expand its small-ship cruise division and offer international voyages.

Selling Windstar allows Carnival to focus on its Seabourn Cruise Line, targeted at affluent travelers.

Shares of Ambassadors International, which also offers event planning and marina management services, rose $3.07, or 6.9%, to $47.48.

Ambassadors will pay Carnival $19 million in cash, and Carnival will loan Ambassadors $60 million, payable over 10 years at 7% interest, with the Windstar ships as collateral.

Ambassadors also will assume $21 million in liabilities from Carnival, including deposits on reservations.

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