Bermuda-registered Sea Containers Ltd. is to sell $35 million worth of shares in affiliate Orient-Express Hotels Ltd. as it moves to reduce more than $150 million in debt which must be paid next year.

The company made the announcement after announcing that net income was $17.9 million ($0.84 per common share diluted) on revenue of $547 million, compared with net income of $6.6 million ($0.35 per common share diluted) on revenue of $356 million in the year earlier period.

For the nine months ended September 30, 2002 net income was $27.9 million ($1.40 per common share diluted) on revenue of $1.23 billion, compared with net income of $13.6 million ($0.73 per common share diluted) on revenue of $974 million in the year earlier period.

Sea Containers also announced its subsidiary Great Northeastern Railway's legal claim against Network Rail Ltd. (the successor to Railtrack Plc) is still not resolved. "This claim relates to lost revenue and extra costs in connection with the Hatfield rail accident and other failings of Railtrack," the company said. "GNER has won arbitration awards holding Railtrack responsible for payment of these amounts (which have been withheld by GNER from track access and other charges) but Network Rail appealed to the Rail Regulator and a decision has not been made."

President James B. Sherwood said the company was facing heavy debt repayments in 2003, including $158 million of senior notes falling due on July 1. The company had planned to sell part of its shareholding in Orient-Express Hotels to meet this obligation but the share price has declined since May from $20 to $13 today.

"In order to meet these obligations the company's board has decided to sell certain other assets, to reduce its shareholding in Orient-Express Hotels to slightly less than 50 percent in order to deconsolidate Orient-Express Hotels from Sea Containers' balance sheet, to increase (ferry operator) Silja's borrowings and to suspend payment of common share dividends," Mr. Sherwood said.

He said this would avoid the need to sell the bulk of its OEH shareholdings at a depressed price.