ORLANDO, Fla., May 22 (Reuters) - Sunterra Corp. (NYSE:OWN), the largest international owner and manager of
vacation ownership resorts, said on Monday its would lay off 930 workers at the company's headquarters and some
resorts in an effort to conserve cash.
The company noted, however, that the cutbacks will not provide the company with enough liquidity to ensure it could
continue operations. ``The company continues to pursue alternatives to maintain liquidity,'' it said in a release.
The company plans to halt all sales activities at several resorts, including Miami and Fort Lauderdale, Fla.; Hilton
Head, S.C., and others. It said it would continue sales activities at its ``most profitable'' locations.
Sales activities will cease at the above resorts, plus Lake Conroy, Tex.; Steamboat Springs, Colo.; Santa Fe, New
Mexico; San Luis Obispo and San Diego, California; and St. Croix, U.S. Virgin Islands.
In addition, it is closing off-site sales centres in Puerto Rico, Virginia, Nevada and the Pacific Northwest.
Last week, the company said it did not make a scheduled payment of $6.5 million on its $140 million in senior notes,
but noted there is a 30-day period before it becomes an event of default. The company also said it defaulted on
a credit facility and a pre-sale line.
Sunterra reported a net loss of $15.6 million, or 43 cents a share for the first quarter. This compares with a
net profit of $10.0 million, or 27 cents a share in the year ago period.
The decline in the company's net worth as a result of the quarter's net loss resulted in violations of certain
requirements of its credit agreements.
The company's shares closed at 1/2, down 1/16 on the day on the New York Stock Exchange. Its 52-week high was 15-3/4.