New Ships, Management Contract Put Silversea In Good Position

With the construction of new sister ships progressing as scheduled and the recently signed contract to manage the world's first ocean-going luxury residence, Silversea cruises is well poised for growth in the next millennium. The line was founded in 1992 with the concept of offering all-inclusive, ultra-luxury cruises to all parts of the world. The first ship, Silver Cloud, debuted in 1994, followed by Silver Wind in 1995. In five years, the line emerged as a leader in the ultra-luxury cruise market and is internationally recognized as the world's best small ship cruise line. The company's strong performance has made it possible to expand the fleet after only four years of operation. In May 1998, Silversea signed a contract for two new ships. Silversea's two new sister ships, the 25,000-grt, 388- passenger Silver Shadow and Silver Mirage, currently under construction at the T. Mariotti Shipyard in Genoa and the Francesco Visentini Shipyard near Venice, Italy respectively, incorporate technological innovations and guest suggestions. Architectural team Petter Yran and Bjorn Storbraaten of Oslo, who designed Silversea ships Silver Cloud and Silver Wind, have been commissioned again to design the two new ships. The new vessels will be quite similar to the existing Silversea ships. Each ship will feature a crew of 295 and a passenger space ratio of 64 — more space per guest than any other cruise ship. Each ship will have 194 ocean-view suites, with more than 80 percent featuring private teak verandas. The ships have been deigned for a greater concentration of larger suites located midship. New aboard each ship will be connecting suites that allow families and friends to travel together but maintain separate rooms. Other new features include a poolside grill, an expanded spa and fitness facility, a computer center, a conference center, a cigar club, a wine bar, and self-service laundry facilities. "These new ships will offer the same standards of luxury that our guests have come to expect aboard Silver Cloud and Silver Wind," said William L. Smith, president and COO of Silversea. "Some of the design specifications have been enhanced following input from our guests, but the hallmarks of Silversea — veranda suites, single seating dining and show lounge, spacious public areas and impeccable service — will certainly be found aboard the new ships. "Both ships will be 11 decks high, 597 x 82 ft. (181.9 x 24.9 m). Each will have a draft of 19.5 ft (5.9 m). and a maximum speed of 21 knots. The first of the two ships, Silver Shadow, will be delivered in September 2000. The Silver Shadow, which is completed up to deck six, was launched at the Visentini Yard on Oct. 9 and arrived at the T. Mariotti Shipyard on Oct. 20 for final construction and outfitting. The ship's inaugural voyage, from Rome to Lisbon, is scheduled for Sept. 15, 2000. The voyage is fully booked and waitlisted. A trans-Atlantic trip from Lisbon to New York is also scheduled, followed by fall cruises down the Atlantic coast to the Caribbean. The ship will spend the winter traveling the coasts of Brazil, Argentina, Uruguay and Chile. Silver Mirage is scheduled for delivery in June 2001. In December 2001, The World of ResidenSea, the world's first ocean-going luxury residence, is scheduled for delivery. Silversea Cruises recently signed a contract with ResidenSea Ltd. to be responsible for the maritime and hotel management of the $262 million, 40,000-grt vessel made up of 110 privately owned residences and 88 guest suites. Silversea will be completely responsible for the sales and marketing of the guest suites, and serve as a consultant during the ship's construction at Norway's Fosen Mek Verksteder A/S Shipyard. "The alliance with ResidenSea was a natural one for Silversea to consider," said Smith. "As purveyors of luxury, both companies have a clear understanding of what today's affluent traveler wants, and each approaches the market with innovation and creativity. Our shared high standards of excellence will ensure a dynamic lifestyle for the residents and a unique travel experience for the visiting guests." Smith added, "The strength of this alliance introduces a whole new aspect to the cruise industry. The opportunities for the cross-selling and marketing of products between Silversea's ships and 'The World' will only serve to expand awareness of the ultra-luxury cruise market. "ResidenSea's CEO, Frédy M. Dellis, said, "Silversea was specifically selected to manage this project because of its stellar international reputation and its commitment to excellent service and attention to detail. Silversea is recognized as an innovator in the ultra-luxury market, as is ResidenSea, and the synergies between the two companies will create a very powerful business partnership." The development of The World of ResidenSea has been enthusiastically received by the residents and the potential purchasers, as well as by the international investment community. Silversea is an equity partner in the project, which is now fully financed by prominent investors from the cruise, shipping and hospitality industries, including: ResidenSea founder Knut Kloster Jr.; Bryn Skaugen, whose family played a role in establishing and developing Royal Caribbean Cruise Lines; Petter C.G. Sundt, of Bergesen d.y. ASA; Atle Bergshaven, owner of one of Norway's leading ship management companies and former vice president of the Norwegian Shipowners' Association; and Einar Nagell-Erichsen, a leading Norwegian hospitality and travel industry developer. Further international investment capital has been provided by Continental Casualty Company, one of America's largest insurance companies and a wholly owned subsidiary of CNA Financial Corporation. The company's financial institutions and advisors, West LB and the Center Group, have jointly arranged and supported the financing.