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Parent company of Windstar Cruises sheds more assets in bid to avoid bankruptcy

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The parent company of Windstar Cruises has announced the sale of another division as it maneuvers to avoid a bankruptcy filing.

In a statement issued Tuesday, the financially struggling company, Ambassadors International, said it would sell its marine division to a company affiliated with its former CEO, Joseph Ueberroth.

The move comes just two weeks after the company announced the quick sale of its travel and events division to a private equity firm.

"The board and management are pleased with this purchase agreement," Ambassadors Chairman Art Rodney said in the statement. "With this transaction and the sale of the travel & events business, we can focus all of our capital and efforts on Windstar Cruises and the small ship luxury segment."

Ambassadors' businesses have been hit hard by the economic downturn, and the company warned last month in its annual 10-K filing with the U.S. Securities and Exchange Commission that it may not be able to continue as a going concern if it isn't able to sell assets, get additional financing and/or renegotiate its debt.

As part of the filing, which was submitted late, Ambassador's independent accountant, Ernst & Young, warned it had "substantial doubts about the company's ability to continue as a going concern."

Ambassadors, which also owns a reinsurance operations and the now defunct Majestic America Line, has put all of its assets with the exception of the Windstar line up for sale.

Ambassadors shut down the money-losing Majestic America Line in November after failing to find a buyer for the business. The line's boats have been placed in long-term storage.

"Due to the current global downturn in the economy, specifically the decrease in vacationers’ discretionary spending and the direct impact this has on the reduction in cruise bookings, decrease in corporate spending on incentive programs and the tightening effect of the credit market on financing for construction projects, we will need additional sources of cash in the immediate future in order to fund operations in 2009," the company explained in the 10-K filing.

In a sign of the cash crunch at the company, Ambassadors failed to make a $1.8 million interest payment due on its debt last month.

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