Gozo partners in Delia property project ordered to pay back €2.4 million loan

One of the main shareholders in the property company redeveloping the former Mgarr Hotel, in which Delia holds a 9% stake, has been ordered to pay BNF over €2 million for defaulting on loan payments.

The company Island Developments and its guarantors, Mark Grech, Joseph Attard and Lucia Attard, were condemned to pay the hefty sum after admitting to a claim filed by the bank in the Gozo courts.

It holds a 65% stake in Mgarr Developments, together with Delia’s 9%, and a further 26% held by Delia’s former law partner Georg Sapiano through the company Plata Chartering.

Magistrate Paul Coppini, presiding the Court of Magistrates in Gozo, observed that the debt had been incurred by means of a public contract in November 2009. The court was called upon to decide the case after the parties had disagreed on the amounts due.

But after the actual amount was ascertained as being €2,452,946 in a sitting on 21 June 2019 by a representative of the bank, Island Developments’ legal counsel announced to the court that he had been instructed to admit the claim. A week later, a formal note of admission was filed.

In view of the admission, the court upheld the plaintiff bank’s claim and declared the defendants to be debtors in solidum for the amount of €2.45 million and ordered them to pay the sum to the bank – plus costs, bank charges and incurring interest at 10.25% with effect from 21 June to the date of final payment.

2017: What is the extent of Adrian Delia’s banking liabilities? Full data here

Mgarr Developments was granted the sum total of €12.3 million in two loans from HSBC Bank in 2006, soon after it acquired the hotel and neighbouring restaurant for a total of Lm3.7 million (€8.62 million) from Easysell Caterers Gozo, a Tumas Group company.

In 2017, shortly before winning the PN leadership election, Delia admitted he could not dispose of his 9% shareholding in Mgarr Developments until a €7.2 million debt to HSBC is actually paid.

Delia was reported to have said that the process of repaying the debt “shouldn’t take longer than 18 months”, pending the finalisation of the apartments and their sale. He blamed the planning authority for “giving us trouble” when the company decided to reduce the number of planned apartments from 80 to 41.