Marine Log

April 7, 2006

Big wheel deal
Delta Queen stern wheel

Ambassadors International, Inc. (Nasdaq: AMIE), whose operations include American West Steamboat Company, says it has reached a definitive agreement with privately held Delaware North Companies to acquire the assets of the Delta Queen Steamboat Company.

The Delta Queen Steamboat Company's three-vessel fleet includes the 436-passenger American Queen, the 416-passenger Mississippi Queen and the 174-passenger Delta Queen. Delta Queen Steamboat Company's cruises recreate the grandeur of the past on the company's luxurious, modern-day and historic sternwheelers.

Delaware North Companies acquired the Delta Queen Steamboat Company in 2002 in the wake of the American Classic Voyages bankrupcy. Chuck Moran, President and Chief Operating Officer, Delaware North Companies said the decision to sell "was driven by the need to focus on growth opportunities in our core business and because of other investment considerations."

Joe Ueberroth, President and CEO of Ambassadors International, Inc., said:, "The combination of the Delta Queen Steamboat Company with American West Steamboat Company takes two significant regional businesses and creates a national, American cruise company. The operations will be combined under our Ambassadors Cruise Group subsidiary and be led by David Giersdorf. Our team is excited to offer our customers a selection of wonderful American itineraries across a fleet of luxurious sternwheelers with dedicated American crews. This acquisition will increase our number of vessels to five and the number of berths from 365 to approximately 1,400 berths, making us the largest operator in our category."

The transaction is subject to the approval of certain debt covenant amendments by the U.S. Department of Transportation and a bondholder, as well as customary closing conditions, and is expected to close by the end of April 2006. Under the terms of the agreement, Ambassadors Cruise Group, LLC, a wholly-owned subsidiary of Ambassadors International Inc., will acquire the three vessels and associated operating assets of the Delta Queen Steamboat Company for $3.0 million in cash, the assumption of approximately $9 million of customer deposits and the assumption of approximately $35 million of fixed- rate, $6.50% debt payable through 2020 and guaranteed by the U.S. Maritime Administration. In addition, the transaction includes contingent consideration of 100,000 shares of Ambassadors International, Inc. common stock, to be granted by the company to the Delta Queen Steamboat Company if certain future financial targets are met in the three years following the close of the transaction.