Marsa shipbuilding sale delayed by six months over changes in 2016 concession

A 70% share transfer for the operations at the Mediterranean Maritime Hub (MMH), the site of the former shipbuilding docks, has been set back six months, pending a change in the conditions of the concession.

MMH – whose ultimate beneficial owner is Paul Abela of Abel Energy – was granted the 65-year land concession by industrial parks regulator INDIS in 2016. It is now seeking to sell a 70% stake to buyers Virtu Holdings and LTV Developments.

But the buyers are seeking a change in concession terms that will allow a wider berth of services to be offered other than the oil and gas services MMH is bound to provide. The changes must be approved by the government regulators.

After signing a letter of intent that was expected to culminate with a share transfer by 30 June, on Monday the two parties announced a conditional share purchase agreement, which remains dependent on a number of conditions that must now be fulfilled by December 2023.

“These conditions include the issuing of all necessary authorisations for the transaction to proceed from the local competent authorities, in line with the guarantor’s obligations arising from a public deed of 1 August, 2016 concerning the transfer by temporary emphyteusis of the site in Grand Harbour, Marsa, today known as the Mediterranean Maritime Hub,” a company announcement read.

“The transaction described above therefore remains subject to the above-mentioned approvals being issued and the fulfilment of the Conditions Precedent.”

MMH, which has to issue bondholders with their annual interest payment, has said the 70% share transfer to Virtu-LTV is required for a €10 million fund transfer to restructure the group’s capital.

Auditors say the capital will allow the group “to meet its financial commitments in the medium term” but warned that given the equity position of the company, “there remains uncertainty should the parties not reach an agreement on final definitive contracts, or... the change in ownership and involvement in the group by the new investors and related capital injection not materialise within a reasonable timeframe.”

The auditors told MMH these events indicated a “material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern.”

MMH services the oil and gas service sector with manpower and technical personnel for offshore and onshore operators, logistical support, yard operations, procurement, and technical services to oil rigs. Since 2018, the group has diversified into yachting maintenance and vessel-hoisting.