Court orders liquidation for St Philip’s Hospital over €12 million debts

The Maltese courts have ordered the liquidation of the company that owns the defunct St Philip’s Hospital in Santa Venera. 

Shuttered for well over a decade, the liquidation order comes from a request by HSBC Malta which said the Golden Shepherd company, which is partly owned by medical doctor Frank Portelli’s Private Health Investment Limited, was unable to pay back its €12 million in debts. 

The company’s last filed statements for 2007 registered losses of €160,000. The hospital shut its doors in 2010. 

In 2018, the company had declared that it was unable to pay court registration fees of €60,000, apart from the outstanding ground rent for its sole physical asset, the St Philip’s Hospital. 

Portelli was said in court to have resisted signing a €7 million constitution of debt in favour of HSBC, given that in 2010 he was hoping to sell his hospital in negotiations with the government’s Foundation for Medical Services. 

HSBC Bank said that the €12 million debt comprised of €5.6 million in interest, but that with ground rent not being paid by Golden Shepherd, the company risked losing the property title to the landowner. 

HSBC also told the Court that it had to seek the liquidation of the company seeing that there was no reasonable outcome for a sale of the property, and that Dr Frank Portelli had also listed himself as a personal creditor of Golden Shepherd by way of unpaid salaries as CEO. 

Outstanding dues were owed to GO plc (€34,000), HSE Laboratory Services (€97,000), ARMS (€500,000), Enemalta (€428,000), and €181,000 in ground rent. 

On his part, Frank Portelli told the Court that St Philip’s Hospital had run aground after the introduction of the electricity surcharge in 2005, saying the hospital’s bills had increased by 190% and that the company could not benefit from a capping on the bills.  

In 2010, he started negotiations with the Foundation for Medical Services for the sale of the hospital, which asset was valued at around €18 million, without the value of its medical equipment or goodwill. But despite agreement on a potential eight-year lease, an eleventh-hour decision was taken not to proceed. 

When the deal fell through in 2012, Portelli toyed with the prospect of suing the government for damages. The deal would have paved the way for the conversion of this private 100-bed hospital, which had closed down after running into financial difficulties, to be converted into a rehabilitation facility. 

Portelli said the last valuations of the hospital property, which covers a 10,000 square-metre plot of land with a gross developed area of 7,500sq.m, tagged it at €35 million. 

Portelli is a former Nationalist Party MP and in 2017 had unsuccessfully contested the PN leadership after it was vacated by Simon Busuttil.