By: BizJournal
(20-03-2002)

A Deerfield Beach travel company tried buying a dream boat once before, but the deal sank. Now, with another refurbished ship set to launch in May, it has bailed on plans for that maiden voyage, too.

Following an announcement that it bought the circa-1959 SS Rembrandt in a lease-purchase deal and planned a sailing schedule starting in mid-year, Cruiseshares has scrapped the itinerary. The ship remains for sale.

Late in 2001, Cruiseshares, a subsidiary of publicly held EXA International in Deerfield Beach, offered time-share units on the ship, like it previously tried with the former Holland American Statendam, currently laid up in Greece as Sea Harmony. The firm had toiled over what the ship would be named. At one time it was suggested that it be called Grande Dame.

But now the Rembrandt is still docked at Freeport in the Bahamas. Cruiseshares cited increasingly strict international safety standards as the reason it backed out of the deal, according to a March 3 report in Maritime Matters.com, an online cruise trade magazine.

Steven Priskie, president of Romantic Cruise Line in Deerfield Beach, a subsidiary of EXA International and Cruiseshares, confirmed tightened requirements killed the deal, which was called off before his firm began taking purchase orders from buyers.

"We don''''t have any deposits at this time," he said.

Priskie said the sale of the Rembrandt to his organization was contingent upon it passing numerous safety and health inspections.

"It was recently brought to our attention that the Rembrandt, while satisfying all regulations for 2005, might not comply for 2010," he said. "We didn''''t know what the future potential of the ship might be, and we didn''''t want to spend millions of dollars on one that didn''''t have potential years from now."

The company is waiting for more information about the Rembrandt, which is back on the market, he said, but is also looking at other ships. An acquisition could happen soon.

"Hopefully that will be in the very near future," he said.

Purchasing a cruise ship can be confusing, especially when dealing with a foreign vessel, Priskie wrote in an e-mail last week.

On several occasions, when dealing with foreign-owned ships, it was difficult to determine who the owners were, Priskie said. Sometimes there were several owners, making deals more difficult. The negotiations were much easier with the Rembrandt because the company was dealing with one owner ­ Credit Suisse/First Boston.

Priskie said his was to be the first cruise ship to offer vacations using the timeshare concept.

A report in September 2000 by the Dallas Business Journal said Leslie Joelson, president of Arrowwood International, and Barry Jones, president of Travel Inc., had launched Cruiseshares Inc. to sell seven-day slices of Romance II, a 400-cabin luxury cruise ship.

"Nothing like this has ever been done before," Joelson said at the time. "Our company is the first of its kind."

Before the partners and their investment group bought Romance II, the ship was part of a Holland America Lines fleet. They declined to disclose a purchase price, but said a new ocean liner would sell for $200,000 to $250,000 per cabin.

The 24,500 gross ton ship was in Greece, undergoing a $17 million refurbishing, according to the report.

Priskie, who would not divulge the price tag for the Rembrandt, confirmed the duo headed his parent company.

The partners were selling the timeshares through an Internet site and 15 offices in Miami, London and Tel Aviv, Israel. More than 300 of the 20,000 cruise-share slots had already been sold. At $7,500 to $16,000 and more per cabin, revenue potential could surpass $200 million, Joelson said.

But like the Rembrandt, the ship never made it out of port, even though the company signed a letter of intent to purchase it in 2000 before financing efforts fell through.

Still, Priskie, who said his firm recently moved from Miami to Deerfield Beach, said that by combining people''''s interest in timeshare vacations with cruising, his firm has identified a unique niche that appeals to a significant segment of domestic and international travelers.

After visiting many potential acquisitions, EXA International said in a press release that it selected the Rembrandt and closed on the ship in late 2001 ­ even though it now says it never bought the ship.

The Rembrandt last sailed for Premier Cruise Line and before that for the Holland America Line, sailing under the name Rotterdam V.

In a press release EXA International said it purchased the Rembrandt out of foreclosure from a division of Credit Suisse/First Boston, and anticipated the first sailing in May. The company said last month its 749-foot-long ship with 555 staterooms was moored in Freeport, where it was undergoing minor renovations. Priskie said his was able to get out of the deal by forfeiting its deposit.

Cruiseshares wanted owners to purchase seven-day cruises. The initial spring cruises were planned for the Caribbean. Cruiseshares were in the $10,500 to $27,000 range and varied based on the size of the stateroom and ­ like traditional timeshares ­ the time of year purchased. Maintenance fees ranged from $770 to $1,200 a year for two people.

Cruiseshares previously stated that it was currently marketing in those states that do not have requirements to file an offering plan.

Florida is the only state that has a timeshare act that includes both real and personal property. Cruiseshares said it will be the first to file an offering plan involving personal property and will work with the state on the technical differences between requirements for land-based timeshares and an ocean-going vessel.

A call to the Division of Florida Land Sales, Condominiums and Mobile Homes ­ which regulates timeshares in the state ­ querying whether it had any jurisdiction over out-of-state sales was not returned by deadline.

"The timeshare industry is growing in Florida," the agency said on its Web site. "Our mission is to be the model timeshare regulatory organization in the United States."

The agency said it fosters compliance with timeshare laws and rules and approves new timeshare resorts. It also monitors current operations for compliance.

"We are confident that another ship will be purchased that will satisfy our criteria for moving forward quickly with our cruiseshare concept," Priskie said.

EXA International was delisted from the OTC Bulletin Board to the pink sheets in 1999. It traded at 48 cents a share last week, and has no profits or revenues.

Previous incarnations of the company include Omnicom Sports & Entertainment, which it did business as until February 1998, and Double Five Financial Corp., which operated until July of the same year. The Florida Division of Corporations lists EXA Internation-al and its Miami predecessor EXA Florida as "inactive." Priskie said the company was working with the state to restore its active status.

E-mail corporations/tourism writer John T. Fakler at JFakler@bizjournals.com