No progress yet in Manoel Island talks

No further talks have been held between the government and MIDI plc over Manoel Island after a first exploratory meeting on 11 June, MaltaToday has learned. 

The talks concern the rescission of the concession agreement granted to MIDI, the return of Manoel Island back to public ownership and any compensation due. 

A schedule of talks between the government and MIDI plc “is still being prepared”, a spokesperson for the prime minister told MaltaToday, adding “no further talks” have been held since the June meeting. 

The talks are intended to reach an out-of-court settlement, thus avoiding years of litigation. 

But the settlement is critical for the company to be able to fulfil its obligations towards bondholders when a €50 million bond reaches maturity in July 2026. 

Manoel Island hit the national agenda after petitioners collected 29,000 signatures asking the government to take back the island and turn it into a public park. 

Prime Minister Robert Abela held meetings with the petitioners and the association representing retail shareholders and bondholders in MIDI plc, who expressed concern over their investment in the company in light of the developments. On 11 June Abela met representatives of MIDI. 

The prime minister’s spokesperson described these meetings as “constructive” and “positive”. 

“These discussions were positive and centred on a thorough review of the entire situation, with a clear focus on serving the national interest,” the spokesperson said, adding the government has filed a judicial letter to “protect the interests of the Maltese and Gozitan people”. 

However, when asked whether follow-up meetings were held with MIDI plc to chart a way forward, the spokesperson confirmed that no such discussions were held yet. 

When asked about progress in the talks with government, a spokesperson for MIDI said the company was bound by confidentiality. “We cannot comment on the matter since we are bound by confidentiality,” the company spokesperson said. 

Bond redemption depends on settlement 

In a company announcement on 24 June, MIDI plc said the company’s strategy was to refinance a portion of its outstanding bond through a new bank loan. The rest of the bond repayment would have been financed by the company’s internal resources. 

But the company said the bank loan was subject to continued progress of the Manoel Island project, including the introduction of a strategic investor. 

Given the government’s declarations that it wanted to take back Manoel Island and turn it into a national park, MIDI said the project and the introduction of a strategic investor could “no longer be pursued”. 

“In light of the new circumstances, this strategy is under review and will be influenced by the outcome of the ongoing discussions with the government. However, it is the company’s intention that compensation received from the termination of the Manoel Island concession will be firstly applied to meet the company’s repayment obligations under the bond,” the company announcement had said. 

The petition and a U-turn 

The petition fronted by Moviment Graffitti and Flimkien għal Ambjent Aħjar focussed on the contractual deadline the company has to ensure the project is “substantially complete” by March next year. 

MIDI will not meet the deadline and had been negotiating an extension based on the delays in the planning process and archaeological excavations. The contract justifies an extension if the delays are outside the company’s control. 

However, after first citing contractual obligations that prevented the government from taking back Manoel Island, Prime Minister Robert Abela did a U-turn and embraced the arguments of the petitioners. 

Abela also accused the company of breaching contractual obligations, something MIDI has denied outright. Nonetheless, the company said it would not pursue its investment on Manoel Island in light of the government’s changed position and expressed willingness to negotiate a settlement by which it would be compensated for the works it has already done, such as the restoration of Fort Manoel. 

Meanwhile, the prime minister’s spokesperson told MaltaToday: “The Prime Minister fully recognises the strong public sentiment surrounding this issue. He reaffirmed his commitment to doing everything in his power to ensure that Manoel Island, irresponsibly handed over to the developers back in 2000, is returned to the people.”