Titanic Exhibitor Faces Crisis;Major Shareholder Selling Stake

Reuters is reporting that Sellers Capital, which has a 46% stake in Premier Exhibitions, has stated it will be selling its position. The reason is that Sellers is facing increased redemption demands and needs to return the capital to its investors. Premier states it is “assessing strategic alternatives” which means it is trying to figure out to handle the sale. Sellers wants to sell its share to a buyer committed to preserving the Titanic artifacts as represented to a Federal court judge in a hearing last year.

The problem, I suspect, is finding an investor (or a group of them) who wants to sink money into this company. Premier handles many exhibitions and Titanic is one of them. An additional problem yet unanswered is the final disposition on the aritifacts. Premier Exhibitions does not own them but is the legal sucessor to the company that did the salvage, RMS Titanic Inc. That company was awarded salvor-in-possession status, not outright ownership of the artifacts. And a federal judge put restrictions on how those artifacts can be used. Premier has filed a motion with the federal court to grant them a salvage award allowing them to sell the artifacts. A ruling has not been made.

Of course there is the possibility of government action. The U.S. government might declare an interest in the matter saying it is of great historical value and use its powers to take them out of Premier’s hands. All of this uncertainty is not something that will attract investors unless they have lots of money to burn. It is quite possible investors from the Middle East or Asia might well end up buying the share.

Source: Reuters, Premier Exhibitions’ Largest Shareholder To Sell Stake, 21 June 2010