Bermuda-based Sea Containers Ltd. subsidiary Orient-Express Hotels has completed its agreement with Nara Corporation of Yokohama, Japan for the acquisition of two Australian hotels.

The combined purchase price for the 100 room Observatory Hotel in Sydney, Australia and the 86 room Lilianfels Hotel in the Blue Mountains 60 miles west of Sydney, is approximately Australian $65 million (US$40 million).

"We are delighted to be strengthening our presence in Australia in such an important year for the country,'' said Simon Sherwood, President of Orient-Express Hotels.

"We have had a very successful association with The Observatory Hotel since the project was first conceived in 1993 and are pleased to bring it under our ownership.

"Lilianfels also has a wonderful reputation, borne out by many national and international awards. In April, 1999, we launched the Great South Pacific Express, a luxury tourist train which runs from Cairns to Sydney via Brisbane, with stops to visit the Great Barrier Reef and the rain forest in Kuranda.

"We can now bring together all three of our businesses and offer both visitors and Australian nationals wonderful experiences in some of the most spectacular scenery in the world.'' Sea Containers Limited has reported that its fourth-quarter net income fell by half from a year ago, as a result of higher fuel prices and less-than-expected millennium travel linked to Y2K fears.

The passenger transport operator, marine container lessor and luxury-end leisure company also said it was exploring methods to boost shareholder value.

President James Sherwood said: "Sea Containers is seriously exploring methods to enhance shareholder value other than through higher earnings.'' Sea Containers said net income for the latest quarter was $8 million on revenues of $330 million, compared with $15.6 million on revenues of $347 million in 1998.

Diluted earnings per share were 43 cents versus 85 cents.

In the fourth quarter, ferry earnings were less than expected due to unusually high fuel prices and exceptionally bad weather in the British Isles, the company said.

Millennium travel was less than expected because of Y2K worries and the decision by many families to turn New Year's Eve into a stay-at-home event.