Marsa shipbuilding: INDIS told MMH not abiding by 2016 concession

A prospective 70% share transfer for the former shipbuilding grounds in Marsa is in the crosshairs of a rival company, that has told INDIS, the Malta industrial parks agency, that tenant Malta Mediterranean Hub is not abiding by its 2016 terms of concession.

MaltaToday understands that Manoel Island Yacht Yard, which runs the marina in Gżira, has informed INDIS that MMH is allowing services that do not respect the 2016 concession for an oil and gas servicing centre.

Mediterranean Maritime Hub Finance plc, whose ultimate beneficial owner is Paul Abela, obtained the former shipbuilding site in a 2016 concession binding the area for use as oil and gas marine facilities. The MMH Group is planning to sell a 70% stake to Virtù Ferries and LTV – the latter owned by Francis Busuttil & Sons – for €10 million.

But while the share transfer was expected to be signed by the end of June, it remains conditional on changes in the concession terms for the Marsa shipbuilding area, which would expand yachting and storage services and ultimately affect the interests of Manoel Island Yacht Yard.

Manoel Island Yacht Yard is owned by MIDI plc, the Mizzi Organisation, Virtu Steamship (not connected to Virtù Ferries), Mariner Capital (Hili), and Central European Advisors (Bianchi).

Tthe 70% share offer remains conditional on necessary approvals from the regulatory authorities due to the 2016 concession, which was granted to MMH through a temporary emphyteusis.

MMH is seeking the cash injection due the state of its equity in 2022, where auditors alerted the company to “uncertainty should the parties not reach an agreement on... any of the terms and conditions related to the said definitive contracts between the present shareholders and the new investors.”

The auditors have warned that should the share transfer not take place “a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern.”

The MMG Group issued a €15 million unsecured bond in 2016 to finance its redevelopment of the 165,000sq.m site, which includes 1,200m of quayside and engineering workshops covering 30,500sq.m.

The area strategically abuts onto the Grand Harbour and currently operates as an operations and supply chain support base for the Mediterranean oil and gas industry.

The transfer of shares remains subject to authorisation from the competent authorities in line with MMH’s obligations arising from the public deed entered into with the government in August 2016.

Virtu Holdings is ultimately the owner of Virtu Ferries, operators of a catamaran service between Malta and Pozzallo. It also operates a fast ferry service between Grand Harbour and Mġarr. LTV Developments is owned by Francis Busuttil & Sons Ltd, also known as Ta’ Bandallu, a major importer of food and groceries.