UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
ORIENT-EXPRESS HOTELS LTD.
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(Name of Issuer)
Class A Common Shares, par value $0.01 each
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(Title of Class of Securities)
G67743 10 7
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(CUSIP Number)
Mr. Edwin S. Hetherington
41 Cedar Avenue
P.O. Box HM 1179
Hamilton, Bermuda HM EX
(441) 295-2244
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
With a copy to:
Stephen V. Burger, Esq.
Carter, Ledyard & Milburn
2 Wall Street
New York, New York 10005
(212) 732-3200
July 22, 2002
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. G67743 10 7
1 NAME OF REPORTING PERSON: Orient-Express Holdings 1 Ltd.
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY): None
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS: WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e): [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION: Bermuda
NUMBER OF 7 SOLE VOTING POWER: 18,044,478 class A common shares*
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: -0-
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 18,044,478 class A common shares*
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: -0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON: 18,044,478 class A common shares*
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 38.9% **
14 TYPE OF REPORTING PERSON: CO
_________
* Issuable upon conversion of an equal number of class B common shares.
** The amount in Row (11) is 38.9% of the sum of (a) the 28,340,601 class A
common shares outstanding on August 15, 2002, and (b) the 18,044,478 class
A common shares issuable upon conversion of the class B common shares held
by the Reporting Person.
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ITEM 1. Security and Issuer.
This Statement on Schedule 13D relates to the class A common shares,
par value $0.01 each (the "OEH Class A Shares"), of Orient-Express Hotels Ltd.,
a Bermuda company ("OEH"). The principal executive offices of OEH are located at
41 Cedar Avenue, Hamilton, Bermuda HM EX. The acquisition transaction described
in this Statement was reported in the Current Report on Form 8-K filed by OEH on
August 6, 2002.
ITEM 2. Identity and Background.
This Statement is being filed by Orient-Express Holdings 1 Ltd., a
Bermuda company and a wholly-owned subsidiary of OEH ("OE Holdings"). The
address of OE Holdings' principal business and principal office is 41 Cedar
Avenue, Hamilton, Bermuda HM EX. OE Holdings' principal business is to hold
shares of its parent, OEH.
Information concerning each director and executive officer of OE
Holdings is set forth in Schedule I to this Statement and is incorporated herein
by reference.
During the last five years, neither OE Holdings, nor, to the best
knowledge of OE Holdings, any of its directors and executive officers listed on
Schedule I hereto (1) has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (2) was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, U.S. federal or state securities laws or finding any violation with
respect to such laws.
ITEM 3. Source and Amount of Funds or Other Consideration.
Under an Amended and Restated Share Owning Subsidiaries Restructuring
Agreement dated as of June 6, 2001 (the "Amended Agreement"), OE Holdings had an
option (the "OE Holdings Option") to purchase up to 18,044,478 shares of the
class B common shares, par value $0.01 each, of OEH (the "OEH Class B Shares")
from Sea Containers Ltd., a Bermuda company ("SCL"), at a price of $0.01 per
share exercisable anytime on or after July 21, 2002 until July 21, 2005, when OE
Holdings would have been required to exercise the option unless a proposed
spinoff distribution of OEH Class A Shares and OEH Class B Shares by SCL to
SCL's common shareholders had previously occurred (the "Spinoff").
Also, under the Amended Agreement, a subsidiary of SCL called Contender
2 Ltd. ("Contender") had an option to purchase up to 12,900,000 class B common
shares of SCL from four wholly-owned subsidiaries of OEH, including OE Holdings
(the "Holding Companies"), at a price of $0.01 per share exercisable at any time
after the earlier of the Spinoff and July 21, 2002 and prior to July 21, 2005
(the "Contender Option"). If the Contender Option had not been exercised before
the Spinoff, Contender would have been required to purchase such shares
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immediately following the Spinoff. Also if the Contender Option had not been
exercised and the Spinoff did not occur, Contender would have been required to
purchase such shares no later than July 21, 2005.
On July 22, 2002, OE Holdings and Contender exercised their respective
options under the Amended Agreement and paid the exercise prices in cash from
their working capital. OE Holdings acquired 18,044,478 OEH Class B Shares at an
aggregate price of $180,445, and Contender acquired 12,900,000 class B common
shares of SCL at an aggregate price of $129,000.
ITEM 4. Purpose of Transaction.
In early 2000, the Board of Directors of SCL developed a plan (the
"Plan") to separate its leisure business from its passenger transport and marine
container leasing, manufacturing and repair businesses, so that the leisure
business would be conducted by an independent publicly-traded company. In
furtherance of the Plan, all of SCL's leisure businesses were transferred to OEH
and its subsidiaries. The Plan has contemplated, among other things, an initial
public offering of OEH Class A Shares (which occurred on August 10, 2000),
additional sales of OEH Class A Shares by SCL, which commenced in August 2001
and are continuing, and eventually the Spinoff.
The Plan contemplated (i) that OEH would have a dual class A/class B
common share capital structure similar to that of SCL, and (ii) that OEH, like
SCL, would have subsidiaries owning a substantial majority of the higher voting
common shares in OEH. In order to achieve this result, the first step of the
Plan was to recapitalize OEH prior to its initial public offering in August 2000
to have both OEH Class A Shares and OEH Class B Shares. These are identical in
all substantial respects except that, while holders of OEH Class A Shares and
OEH Class B Shares vote together as a single class on most matters requiring
shareholder approval, the holders of the OEH Class B Shares have one vote per
share and the holders of the OEH Class A Shares have one-tenth of one vote per
share. Also, the OEH Class B Shares are convertible at any time into an equal
number of OEH Class A Shares, but not vice versa.
The second step of the Plan, achieving a share owning subsidiaries
ownership structure for OEH, was accomplished by the Share Owning Subsidiaries
Restructuring Agreement dated July 21, 2000 among SCL, OEH, the Holding
Companies and Contender (the "Original Agreement"). In summary, under that
agreement, SCL transferred to OEH for no consideration the Holding Companies,
and the OE Holdings Option and the Contender Option were established. If the
Spinoff were to occur and/or the OE Holdings Option were exercised, the Holding
Companies would receive a substantial number of OEH Class B Shares and remain
subsidiaries of OEH, while Contender would receive upon exercise of the
Contender Option 12,900,000 class B common shares of SCL and remain a subsidiary
of SCL. Thus, OEH subsidiaries (the Holding Companies) would own a substantial
number of the higher voting shares in OEH (the OEH Class B Shares). Under
Bermuda law, common shares of OEH owned by its subsidiaries are outstanding and
may be voted by them.
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In June 2001, the parties to the Original Agreement, with the approval
of the shareholders of SCL at their annual general meeting on June 6, 2001,
entered into the Amended Agreement. In general, the Amended Agreement ratified
and approved the transfer of the Holding Companies to OEH and amended and
restated the share voting limitations imposed on the Holding Companies, the
dividend waiver that the Holding Companies had given, and the share purchase
option rights that the Holding Companies and Contender had been granted. The
Amended Agreement also added provisions relating to conversion of OEH Class B
Shares by SCL, contribution of OEH Class A Shares or OEH Class B Shares by SCL
to the Holding Companies, sales of additional OEH shares by SCL, and
distributions of OEH shares by SCL to its shareholders in transactions other
than the Spinoff.
Because of delay in the proposed Spinoff by SCL, the Boards of
Directors of OE Holdings and Contender determined to exercise the OE Holdings
Option and the Contender Option, respectively, at the earliest practicable date
under the Amended Agreement which was July 22, 2002. As a result of the exercise
by OE Holdings and Contender of their respective options on that date, voting
control of OEH passed from SCL to OE Holdings. Under Bermuda law, the OEH shares
owned by OE Holdings, a wholly-owned subsidiary of OEH, are outstanding and may
be voted, although they are disregarded for purposes of earnings per OEH share
calculations under U.S. generally accepted accounting principles while they are
owned by OE Holdings. In a takeover of OEH, this share owning subsidiary
structure may assist in maximizing the value OEH shareholders receive in a
takeover transaction.
SCL has publicly indicated that it intends to reduce its "equity"
shareholding in OEH to 50% or less in order to deconsolidate OEH from its
balance sheet. At July 31, 2002, SCL owned 15,889,201 OEH Class A Shares and
2,459,399 Class B Shares that are convertible into OEH Class A Shares.
Apart from the foregoing, neither OE Holdings, nor, to the knowledge of
OE Holdings, any of the persons listed in Schedule I hereto, has any present
plans or proposals, as a shareholder of OEH, which relates to or would result
in:
(a) the acquisition by any person of additional securities of OEH, or
the disposition of securities of OEH;
(b) an extraordinary corporate transaction, such as a merger,
reorganization, or liquidation, involving OEH or any of its
subsidiaries;
(c) a sale or transfer of a material amount of the assets of OEH or
any of its subsidiaries;
(d) any change in the present board of directors or management of
OEH, including any plan or proposal to change the number or term
of directors or to fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend
policy of OEH;
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(f) any other material change in OEH's business or corporate
structure;
(g) changes in OEH's charter or by-laws or other actions which may
impede the acquisition of control of OEH by any person;
(h) a class of securities of OEH being delisted from a national
securities exchange or ceasing to be authorized to be quoted in
an inter-dealer quotation system of a registered national
securities association;
(i) a class of equity securities of OEH becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934; or
(j) any action similar to any of those enumerated above.
However, such plans or proposals may have been considered, and may from time to
time hereafter be considered, by the persons listed in Schedule I in their
capacities as directors and/or executive officers of OEH.
ITEM 5. Interest in Securities of the Issuer.
(a) and (b) OE Holdings is the indirect beneficial owner, with sole voting
and dispositive power, of 18,044,478 OEH Class A Shares issuable
upon conversion of 18,044,478 OEH Class B Shares which OE
Holdings holds directly. These OEH Class A Shares represent
approximately 38.9% of the OEH Class A Shares currently
outstanding. Also, to the best knowledge of OE Holdings, the
following table shows the number of OEH Class A Shares
beneficially owned directly, with the sole voting and dispositive
power, by its directors and executive officers:
Name No. of Class A Shares
---- ---------------------
James B. Sherwood...................... 282,300
John D. Campbell....................... 1,000
Daniel J. O'Sullivan................... -0-
John R. Edney.......................... -0-
A. Shaun Morris........................ -0-
Hiren A. Patel......................... -0-
Voting and dispositive power with respect to the OEH Class B
Shares beneficially owned by OE Holdings is exercised by its
Board of Directors, the members of which are listed in Schedule
I. Messrs. Sherwood, Campbell and
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O'Sullivan are members of the Board of Directors of OEH. Messrs.
Sherwood and Campbell are also members of the Board of Directors
of SCL, which exercises the voting and investment power with
respect to the 15,889,201 OEH Class A Shares and 2,459,399 OEH
Class B Shares still beneficially owned by SCL. Messrs. Sherwood
and Campbell disclaim beneficial ownership of the OEH common
shares owned by OE Holdings and SCL.
(c) Apart from the option exercises on July 22, 2002, described in
Items 3 and 4 of this Statement, neither OE Holdings nor, to the
best of its knowledge, any of its directors and executive
officers listed in Schedule I to this Statement, has effected any
transactions in the OEH Class A Shares at any time since May 23,
2002 (60 days before July 22, 2002).
(d) Not applicable.
(e) Not applicable.
ITEM 6 Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of OEH.
Except as described in Items 3 and 4 of this Statement, to the best
knowledge of OE Holdings, there are no contracts, arrangements, understandings
or relationships (legal or otherwise) among the persons named in Item 2 or
listed in Schedule I hereto, and between such persons and any person with
respect to any securities of OEH, including but not limited to transfer or
voting of any of the securities of OEH, joint ventures, loan or option
arrangements, puts or calls, guarantees or profits, division of profits or loss,
or the giving or withholding of proxies, or a pledge or contingency the
occurrence of which would give another person voting power over the securities
of OEH.
ITEM 7. Material to be Filed as Exhibits.
1. Amended and Restated Share Owning Subsidiaries Restructuring
Agreement dated June 6, 2001, among Sea Containers Ltd.,
Orient-Express Hotels Ltd., Orient-Express Holdings 1 Ltd.,
Orient-Express Holdings 2 Ltd., Orient-Express Holdings 3 Ltd.,
Orient-Express Holdings 4 Ltd. and Contender 2 Ltd., filed as
Exhibit 2.1 to the Quarterly Report on Form 10-Q of
Orient-Express Hotels Ltd. for the quarter ended June 30, 2001
(Commission file no. 1-16017) and incorporated herein by
reference.
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SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
OE Holdings certifies that the formation set forth in this statement is true,
complete and correct.
Dated: August 22, 2002 ORIENT-EXPRESS HOLDINGS 1 LTD.
By:/s/ Edwin S. Hetherington
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Name: Edwin S. Hetherington
Title: Assistant Secretary
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SCHEDULE I
The name, citizenship and present principal occupation of each director of
Orient-Express Holdings 1 Ltd. are set forth below. The business address for
each person listed below is c/o Orient-Express Holdings 1 Ltd., 41 Cedar Avenue,
Hamilton, Bermuda HM EX. Orient-Express Holdings 1 Ltd. has no executive
officers.
Name and Citizenship Position with OE Holdings Present Principal Occupation
-------------------- ------------------------- ----------------------------
James B. Sherwood Director President of SCL;
(U.S. citizen) Chairman of OEH
John D. Campbell Director Vice President of SCL; Vice President of
(British citizen) OEH; Senior Counsel of Appleby Spurling &
Kempe (attorneys), 41 Cedar Avenue,
Hamilton, Bermuda HM EX
Daniel J. O'Sullivan Director Senior Vice President - Finance and Chief
(British citizen) Financial Officer of SCL
John R. Edney Director Consultant to Sea Containers Property
(British citizen) Services Ltd. (an SCL subsidiary), 20 Upper
Ground, London SE1 9PF, England
A. Shaun Morris Director Partner in Appleby Spurling & Kempe
(British citizen) (attorneys), 41 Cedar Avenue, Hamilton,
Bermuda HM EX
Hiren A. Patel Director Partner in Appleby Spurling & Kempe
(British citizen) (attorneys), 41 Cedar Avenue, Hamilton,
Bermuda HM EX
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