Due to Sheltem's interfence, the ship crashed on the planet, and most of the VARNs sunk. The remaining VARNs became the titular Isles of Terra. This disaster was the catalyst for the Ancients sending Corak to stop Sheltem.
The Shikbath Zera can be accessed by going beneath the pyramids of Terra. The party enters the spaceship at the end of the game in their efforts to follow Sheltem and Corak.