Read the memo Villa Vie Residences CEO sent to residents as the ship's finances reached a 'critical point'

• The boss of Villa Vie Residences sent passengers an “urgent” appeal for financial help in August.
• Three months before the cruise halted in Cambodia, CEO Kathy Villalba warned of soaring fuel costs.
• “We have now reached a critical point,” she wrote. Read the full message to residents below.

Almost three months before Villa Vie Residences suspended operations on Tuesday, leaving residents of the “never-ending” cruise stranded in Cambodia, the company had already warned the Odyssey’s residents that it was running out of money for fuel.

In an August 1 memo to residents labeled “urgent,” Villa Vie CEO and founding partner Kathy Villalba asked residents for financial contributions to buy fuel.

The memo, which Business Insider reviewed, said the company needed to make “immediate and creative operational decisions to preserve the voyage.”

The company behind the 509-cabin ship had promised a permanent life at sea and a voyage around the world every three-and-a-half years for its residents. That came to an abrupt halt on Tuesday, when residents were told to disembark with only a few hours’ notice.

In a Tuesday statement announcing it had halted operations, Villa Vie said it had taken “significant steps to reduce fuel consumption” after prices rocketed following the onset of the US-Israel war with Iran in February, but that these steps had not been enough.

Villa Vie founder Mikael Petterson told Business Insider in a phone call on Wednesday that the fuel price surge triggered a “cascading effect” that culminated in the suspension of operations.

Financial pressures became clear to residents in April, two months after the war in Iran began, when Villa Vie asked residents to loan the company money, offering interest rates of 12% to 24%, according to a separate letter viewed by Business Insider.

And by August, Villa Vie had reached a “critical point,” according to Villalba’s message, which you can read in full below.

Villalba, Petterson, and Villa Vie did not respond to multiple requests for comment from Business Insider.

URGENT OPERATIONAL UPDATEConfidentiality Reminder: This communication contains confidential and proprietary information intended solely for current Residents and authorized participants of the Villa Vie community. It is being shared through Circle as part of our commitment to transparency and open communication. We respectfully ask that you do not repost, forward, or otherwise distribute this information outside of Circle without the prior written consent of Villa Vie Residences.Dear Residents,We want to provide you with a direct, straightforward update regarding Odyssey’s current operational realities.When the fuel contribution was requested several months ago, participation was not universal. The contributions received helped some, but they covered only part of the extraordinary increase in fuel costs. Since then, the company has exhausted its available reserves covering the remaining shortfall and keeping Odyssey moving.We had hoped that improving conditions in the region would begin to stabilize fuel prices. Unfortunately, the continued conflict and renewed market disruption have caused prices to rise sharply again. This is not simply an itinerary issue. It is an immediate cash-flow challenge that directly affects our ability to purchase the fuel required to continue the voyage.Odyssey currently needs approximately 650 metric tons of fuel. Under normal market conditions, that fuel would cost approximately $450,000. At today’s prices, the cost is nearly double ($800,000).We have now reached a critical point. The lack of full participation, combined with the unprecedented increase in fuel costs, means we must make immediate and creative operational decisions to preserve the voyage.We are working toward receiving a partial fuel delivery as early as Monday. Our berth is available until Friday, August 7 at 4:00 p.m., subject to final confirmation from the port agent and Singapore Port Authority. The current recommendation is to remain alongside until August 7 and then sail at a slower, more economical speed to Nha Trang for our scheduled arrival on August 12.We are asking every Resident who did not previously contribute to please do so now. We are also asking those who are able to provide additional support to consider helping with this immediate fuel requirement.While every Resident has a contract with Villa Vie, this international crisis has created costs far beyond the circumstances contemplated when those agreements were made. The financial need is real, immediate, and necessary to keep Odyssey moving. This is a moment when preserving our home and continuing the voyage requires support beyond contractual minimums from those who are able to provide it.To conserve fuel and reduce operating costs, we will cancel Brunei and proceed directly from Singapore to Nha Trang. This will help reduce the expense, but it does not eliminate the need to fund the required bunkering.We will provide another update as soon as the fuel, berth, and departure arrangements are confirmed.Thank you for your understanding and support.— VVR Management.”

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