UPDATE 1-Premier Exhibitions' largest shareholder to sell stake

* Largest shareholder Sellers Capital to sell stake

* Sellers Capital to return capital to its investors

* Says fund to return capital over 12-18 months

June 21 (Reuters) - Premier Exhibitions Inc (PRXI.O) said it is assessing strategic alternatives and its largest shareholder Sellers Capital Master Fund Ltd has begun seeking a buyer for its 46 percent stake in the exhibition operator.

The fund, facing redemption requests, plans to return all capital to its investors over the next 12 to 18 months, Premier said in a statement.

Sellers Capital has also advised Premier that it will not sell any of its shares in the open market.

"The best course of action to protect both SCF's investors and Premier's shareholders is to implement a 12-18 month lockup and take our time to look for the right buyer for our shares," Mark Sellers, chairman of Premier's board and managing member of the fund said.

The right buyer will commit to the multi-year plan the company presented to a court last November regarding expanding its role as trustee of the Titanic wreck site, Sellers said.

The company, which holds exhibitions that display artefacts salvaged from the Titanic's wreck, has filed a motion seeking an award for artefacts it has helped recover from the wreckage.

The company, struggling with low attendance levels at its exhibitions, has restructured its business, raised capital and amended or severed ties with trading partners in an effort to turn its fortunes around.

Shares of the company closed at $1.32 Monday on Nasdaq. (Reporting by Abhishek Takle in Bangalore; Editing by Jarshad Kakkrakandy)