Europa Cruises Corp. scuttling ship business in favor of new casino on Gulf Coast

Wednesday, Aug. 9, 2000 | 9:57 a.m.

JACKSON, Miss. - Europa Cruises Corp. is scuttling its cruise ship operations in hopes of luring more lucre with a new casino development.

The Madeira Beach, Fla.-based company said it will sell its remaining cruise ships through its EuropaSky Corp. and Europa Cruises of Florida 1 Inc. subsidiaries and concentrate instead on developing a casino in Mississippi.

The company said it will sell its M/V Europa Sky and M/V Europa Star and lease its Madeira Beach port to Stardance Casino Inc. of South Carolina for $7.3 million.

Europa previously sold two other ships to the same company. The deal is expected to be complete by May 1.

Deborah Vitale, Europa chairwoman, president and CEO, said the proceeds of both sales will go toward paying down company debt, including $2.5 million to First Union National Bank of Florida and another $900,000 owed to the Florida Department of Revenue.

"These sales allow the company to meet the demands placed by its lender," she said. "In addition, once the transfer of operations in Madeira is complete, management will be able to focus its full-time attention and resources on the development of the company's Diamondhead, Miss., project."

Vitale said Europa will develop a 404-acre tract of property on the Bay of St. Louis through its wholly owned Casino World Inc. subsidiary. The land is located near Interstate 10.

Before the first plans can be filed, Vitale said two lawsuits filed by environmentalists must be decided.

Vitale said the lawsuits assert development along the bay could detrimental.

"They claim wetland damage," she said.

But the company may face problems in developing a bankable customer base and marketing a casino in an area already inundated by casino properties.

"There's a large, very expensive property (Beau Rivage) not too far down the street that is still struggling," said Daniel Davila, a gaming analyst with Hibernia SouthCoast Capital. "I would be very careful about what I would build on that site, given what is happening in Biloxi."

Beau Rivage has had financial troubles, but the $700 million experiment in Biloxi beach did generate an $18 million profit for parent company MGM Mirage during the three months ending in June.

Europa comes to the table with little experience in land-based casinos, but Vitale said its experience with gambling cruise ships can be parlayed into getting customers to its proposed casino.

Europa's initial plans call for a luxury hotel and spa, a sports and entertainment center, more than 120,000 square feet of gaming space, a business conference center and an executive golf course.

Vitale said the company is emerging from the sale of its gambling boats almost debt-free and wants to avoid the uncertainty of operating the gambling boats in Florida.

"Frankly, we want to focus on Mississippi," she said.

Investors seemed to agree. In trading on the Nasdaq OTC Bulletin Board, investors bidded up shares of Europa 3 cents to close Tuesday at 51 cents per share, an increase of 6.25 percent.