PN had committed to selling ten clubs to control escalating debt

Party created 'Patria Trust', structure aimed to alleviate pressure of rising interest rates on debt running into many millions

The Nationalist Party had in 2015 committed to selling ten clubs over a ten year period
The Nationalist Party had in 2015 committed to selling ten clubs over a ten year period

The Nationalist Party had entered into a commitment in 2015 to sell ten of its clubs over a ten year period, in an effort to control its escalating debt.

Interest rates on the debt would have eventually reached such high levels that the party would not have been able to manage the situation, a source privy to the party’s financial situation told Times of Malta. The source added that the party was at risk of having its assets seized by the banks had it not taken action to address the debt situation.

In order to sell the clubs over a ten year stretch, a financial structure called Patria Trust was created, the aim being to alleviate the pressure of the mounting interest rates on a multimillion-euro debt. The sole trustee of the trust is Joe Borg, the PN’s ex-foreign affairs minister and former EU commissioner, and his Swieqi residence is its registered address.

Around the middle of 2015, a deed of trust was drawn up at HSBC’s Valletta branch, in what was termed a “securitisation process”, which had the result of raising around €2 million, the newspaper reported.

The trust covers the clubs in Cospicua, Qormi, St Paul’s Bay, Zejtun, Fleur de Lys and Birzebbuga, amongst others.

The sources also explained that rather than a wealth management exercise, this was an effort to manage the debt situation. The situation was, and still is, very serious, they maintained, and a promise of sale agreement had been signed for the sale of the Cospicua club, with the sale of the Ghaxaq and Zejtun clubs currently being "on hold".

Adrian Delia, Nationalist Party leader, did not confirm or deny whether such a trust existed, but told the newspaper he was “examining the situation”, and explained that "the main challenge is finding ways to make these properties work for you".

The party is currently considering making good on its debts by renting out clubs and turning them into catering or commercial establishments, which might avoid the need to sell them.

Delia also told the newspaper that, although it would be tempting to sell, given the sky-high property prices right now, other ways of getting the best out of the fixed assets should also be looked into.

He also claimed that recent reports that the PN's funds would only last till January were unfactual, and that the significant expense of the party's media was more worrying to the PN than its clubs.

 

 

 

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