EXHIBIT 99.2
FOR IMMEDIATE RELEASE CONTACT: LIN MORISON
CEO
407-532-1000 OR
RICHARD GOODMAN
CFO
407-532-1000
SUNTERRA CORPORATION FILES VOLUNTARY CHAPTER 11 PETITION;
DEBTOR-IN-POSSESSION FINANCING SOUGHT
ORLANDO, FLORIDA (MAY 31, 2000) - Sunterra Corporation (NYSE: OWN) today
announced that it and certain of its subsidiaries have filed a voluntary
petition for relief under Chapter 11 of the United States Bankruptcy Code. The
petition was filed in the United States Bankruptcy Court for the District of
Maryland (Baltimore). The filing should allow Sunterra and its subsidiaries to
operate while Sunterra seeks approval of a plan of reorganization. The Company
also announced that it has executed a financing commitment letter with Ableco
Finance LLC, an affiliate of Cerberus Capital Management LP and Gabriel Capital
Group, for "debtor-in-possession" ("DIP") financing, which, subject to court
approval, will provide immediately to Sunterra an interim facility of up to $25
million. Subject to satisfactory completion of other conditions, including
further due diligence by the lender and court approval, the DIP lender has
agreed to expand the facility to $53 million.
Sunterra Europe, Sunterra Pacific, Marc Resorts and RPM are not
included in the filing.
Additional information will be forthcoming as soon as first day orders
and financing orders have been approved.
Sunterra Corporation is the largest international owner and manager of
vacation ownership resorts, with 90 resort locations around the world and about
300,000 worldwide owners and members. In addition, Sunterra currently manages 17
third party condominiums and other resorts in Hawaii. The Company's operations
consist of (i) marketing and selling vacation interests, (ii) developing,
acquiring and operating vacation ownership resorts, (iii) financing customers'
purchases and (iv) providing resort rental, management and maintenance services.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS. Certain
statements in this release constitute forward-looking statements subject to the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements include, among other things, statements
regarding the proposed plan of reorganization and its intended consequences,
such as the company's expectations of continued normal operations, the
availability of DIP financing, the restoration of the company's credit
availability, the alleviation of the liquidity crisis with a debt restructuring
plan, and the anticipated deleveraging of the company's balance sheet. Although
management believes that the forward-looking statements in this release are
based on reasonable assumptions, actual results may differ materially from those
expressed in any of the forward-looking statements. Forward-looking statements
relating to the proposed plan of reorganization and its intended consequences
are subject, among other things, to confirmation of the plan and the terms and
conditions of the company's DIP financing commitment, including Bankruptcy Court
approval thereof. Other factors that may cause actual results to differ
materially from those expressed in any forward-looking statement include the
impact that public disclosures of the company's liquidity situation and Chapter
11 filing may have on sales, the success of the company's restructuring efforts,
the timing and terms of future acquisitions and disposals, the integration of
acquired operating companies and resort properties and other factors identified
in the company's filings with the Securities and Exchange Commission, including
those set forth in parts I and II of the company's Annual Report on Form 10-K
for the year ended December 31, 1999 and in the company's Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K filed during 2000.
