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January 16, 2004

Royal Olympic reaches agreement with German banks

Royal Olympic Cruise Lines, Inc., says it has "amicably resolved" its differences with two German lending institutions. The agreement will see two ships built for Royal Olympic by Blohm+Voss, coming out from Chapter 11 proceedings and going on the block. Should the banks then acquire them, the ships may be made available to cover any commitments made for them by Royal Olympic through to the end of the Summer 2004 season, including this year's Olympic Games.

Separately, Royal Olympic announced changes in its management and Board of Directors. Yiannos Th. Pantazis has resigned as Chief Executive Officer, but will continue to serve as a Member of the Board, and Leonidas Xanthakos, an officer and director of subsidiary shipowning companies of Royal Olympic, has been elected to the Board of Royal Olympic and appointed to the position of Chief Executive Officer. In the course of his career, and among other positions, Xanthakos also has served as General Manager of the Coca Cola Hellas subsidiary of Esso Pappas.

Yesterday, Royal Olympic said that it and two subsidiaries that are subject to a Chapter 11 reorgamization pending in Honolulu, had "amicably resolved their differences with German lending institutions by an agreement for the resolution of the pending proceedings by consent."

The two subsidiaries are Olympic World Cruises, Inc., which owns Olympia Voyager, and Royal World Cruises, Inc., which owns Olympia Explorer.

Royal Olympic hailed the agreement as "a major step forward for resolution of the present impasse facing the company, which also involves the arrest in Durban, South Africa, of the vessel Olympia Countess.

Today, Royal Olympic Cruises, Inc. said that under the agreement it and its two subsidiaries would consent to the lifting of the automatic stay in the Chapter 11 proceeding and will consent to the lenders proceeding with the arrest and judicial sale of the two vessels.

The deal also aparently gets Royal Olympic off the hook of its parent guarantees of the obligations of the two shipowning subsidiaries,contingent upon the satisfaction of certain conditions.

Now, read the following carefully. Royal Olympic says that "Expressly without committing the lenders to enter any legal or binding obligation whatsoever to any person or party (on the basis that this shall not constitute a representation or warranty), should the first mortgagees of the Vessels or their nominees acquire the Vessels or either of them at the judicial sales, the lenders will, entirely without commitment, consider entering into discussion with Royal Olympic and/or prospective charterers and/or prospective cabin space charterers (as the case may be) with a view to exploring the possibility (on normal commercial arm's length terms ) of the Vessels or either of them being utilized to perform any commitments/contracts/charters currently entered into by or on behalf of Royal Olympic for the remainder of the 2003/2004 winter and the 2004 summer seasons, including the Olympic Games August 2004."

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