Investors plan to restore former luxury ocean liner 3 businessmen buy the vessel for $2.6 million.

April 28, 1992|By Newport News Daily Press

NEWPORT NEWS, Va. -- A Turkish shipyard owner says he plans to restore the neglected luxury liner S.S. United States after he and other investors paid $2.6 million for the former queen of trans-Atlantic passenger ships.

The representative of a group headed by shipyard owner Kahraman Sadikoglu outbid a handful of scrap dealers and others in the yesterday's auction.

Mr. Sadikoglu, who said his Turkter Shipyard in Istanbul is the country's biggest, said he and two other investors he would not identify plan to raise $140 million more to return the 990-foot United States to something like its former glory.

The job will keep 1,600 workers at his yard busy for the better part of 2 1/2 years, Mr. Sadikoglu said.

He added that restoring the ship would be economically impossible in a U.S. or European yard, where wage rates are much higher than in Turkey.

Despite the expense, Mr. Sadikoglu predicted that the ship will be a bargain.

"Today, to build such a ship needs about $500 million," Mr. Sadikoglu said.

He said he could refurbish the vessel to carry about 2,200 passengers and thus be competitive in the cruise market in the Caribbean or elsewhere, even possibly resuming trans-Atlantic passenger service.

Carnival Cruise Lines Inc., a major cruise operator based in Miami, recently contracted to build a ship capable of carrying 2,600 passengers for $330 million. That's a higher per-passenger cost than Mr. Sadikoglu is predicting for the United States.

However, Bob Dickinson, Carnival's senior vice president for sales and marketing, said that while it's possible to convert the United States to a cruise ship, the $140 million figure sounded low.

"For that amount of money, he would have to use it in the Eastern Hemisphere," Mr. Dickinson said. "Based on my knowledge of the product, given the amount of money he's spending, it would not likely be suitable for American passengers."

The faded liner, which has been out of service since its last Atlantic crossing in 1969 and sat rusting at a coal pier in Newport News for the past three years, will be moved within a month, as soon as his lawyers can do the paper work and get the Coast Guard permission necessary to allow the ship to be towed away, Mr. Sadikoglu said.

Mr. Sadikoglu said he would want to keep the name "United States," if he can get permission, and called buying the vessel a great honor.

The auction was forced by CSX Transportation Inc., owner of the pier, which last year sued the former owner, Richard Hadley, for back wharf fees that had risen to about $275,000 by the time of the auction.

But CSX made it clear from the outset that its real goal was to recover use of its Coal Pier 15.

A lawyer for CSX, Karen Koster, said her company would give the buyer up to six weeks to move the ship.

"We have certain incentives to make it more expensive after that," she said of the wharfage her company would charge Mr. Sadikoglu. "We don't want to go through this again."

Mr. Sadikoglu said his fellow investors, operating through a U.S. corporation, Marmara Marine Inc., had been negotiating with U.S. and Japanese banks to raise the bulk of the money to be used in refurbishing the United States.

"We're putting about $20 million to $25 million of our own equity into it," he added.

He estimated that the banks the Turkish investors hope to bring together would each put in no more than $15 million each for the project.

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