Sensation Yachts optimistic of better times ahead

by Media Services on 21 May 2009 In the week his sister-in-law, Lynette Erceg, made the list of Forbes Asia richest, Sensation Yachts owner Ivan Erceg has been pursued to the south of France, with creditors impounding his luxurious 50m superyacht, Sensation, but Erceg is confident he can manouvre his way out of the red and into prosperity again.

Writs were attached to the mast of the yacht while it was berthed at Marseille earlier, preventing it from leaving port.

The 50 metre-long Sensation is in good company on the Riviera. Built at Sensation Yachts' Henderson yard, and launched in 2007, it has five double guest suites and quarters for nine crew.

Its cabins are lined with marble and exotic hardwoods, with the main salon featuring a grand piano and a bar. There is also a formal dining room with seating for 10 and a Jacuzzi on the teak-lined deck.

The yacht's twin 3000hp engines give it a maximum speed of 22 knots and cruising speed of 18 knots.

Erceg has been quoted as saying the yacht was commissioned by his late brother, billionaire liquor baron Michael Erceg, and he inherited the partially built vessel after his brother was killed in a helicopter crash in 2005.

He said Sensation Yachts was to have received $250,000 a week from Michael to complete the vessel, but that arrangement had stopped after Michael's death and he had paid for it to be completed from his own resources.

Erceg said the company had not received any payments for work done on the Russian boats since 2004.

'So all the funding for the entire shipyard has come from my own resources and other family members,' he said.

He was now trying to sell the yacht and his mansion on the Cote d'Azur, both of which are owned by his family trust. Sensation had an asking price of E26.5 million ($60m) and the mansion was listed for sale at E48m ($108m).

Erceg said the proceeds of those sales would give him more than enough cash to rejuvenate his boat building business. He would be having discussions with a potential buyer for the boat this weekend, then he would be spending time at the Monaco Grand Prix and the Cannes Film Festival, looking for potential buyers for the house and boat, or investors in the business.

In March, the high court ordered Sensation to pay $US21.5m ($36m) in a dispute over the construction of three superyachts for some Russian clients. The yachts remain in Sensation's sprawling West Auckland boatyard in various stages of construction, although Erceg said his lawyers had filed an appeal with the Supreme Court over the dispute.

They are unlikely to be finished any time soon. Only a handful of staff remain at Sensation's yard, where more than 150 workers used to build some of the world's most expensive pleasure craft.

And the boatyard itself, which is owned by Erceg personally, was put up for sale by its mortgagee HSBC in January, but remains unsold.

Sensation has also faced a string of legal actions from creditors and former employees over money they claim to have been owed. He also hoped to secure a new investor who would provide sufficient funds to take the company forward.

Sensation had plans to build what Erceg described as 'green boats', powered by diesel-electric motors. They would be extremely automated and require a crew of just two. Most superyachts require crews of around 10.

Erceg also said he had developed an automated construction process which would reduce the amount of time required to build a 45-metre yacht from around 175,000 man hours currently, to about 30,000 man hours.

'That's what Sensation is all about. It's moved itself to the cutting edge. We have a robotic process that [means] instead of taking 18 months to build a vessel, we can do it in six weeks.'

More at www.sensation.co.nz