Adrian Delia tries to solve PN finances with €3 million Global Capital ‘cedoli’ bid

The leader of the Nationalist Party was exploring the possibility of setting up a special company so that a Maltese insurance firm could purchase millions in promissory notes from the PN, under the ‘cedoli’ scheme. 

In conversations with a middleman during the summer of 2018, who had suggested that Adrian Delia meet Global Capital chairman Paolo Catalfamo for lunch at the Phoenicia Hotel, the PN leader enquired about securing €5.6 million in finance through the PN cedoli scheme. 

Delia enquired whether it was “realistic” to get the amount invested in the PN’s loan notes, after the middleman suggested a meeting with Catalfamo – whom he refers to as “my Global Capital CEO” – to discuss the firm’s forthcoming launch of Palladium, the first-ever initial convertible coin offering (ICCO). Palladium launched a bid to raise €150 million and set up a platform that allows people to trade and bank tokenised crypto assets and securities. 

In the phone messages seen by MaltaToday, the middleman – who initiated the discussion – is asked by Delia: “how realistic is it to get 5.6m to buy PN cedoli at 4% p/a and capital after 10 years?” 

The PN loan notes scheme were launched by former leader Simon Busuttil as a way of raising millions in finance needed to clear the PN’s debt. The scheme has been criticised for its opacity, since it falls out of the remit of party financing rules on donation. 

In the conversations, the middleman – who greeted Delia with the moniker “chief”, suggesting intimacy with the PN leader – replies that such a large amount was outside investment parameters, now clearly referring to a specific product, and that the maximum investment at any one time was of €1.5 million. 

“Explain better,” Adrian Delia says. “Can’t you split it in pieces?” he asks, hoping that the amount required can be broken down over more than one investment. “[Because] you have only one investor you mean? Couldn’t we find more?” 

The contact replies in the affirmative. “Yes. If the bond is secured against property I may be able to double it.” 

Delia responds positively. “Understood. So €1.5m unsecured. €3m secured. Tell me what you need to commit,” he says, now outlining a position where a portion of the loan notes would include property as security. 

His middleman replies: “Yes that’s the investment limit… Will need to speak with Paolo. Will it be secured but [with] an equal value of local property?” 

The middleman then suggests that a special company can be used to receive the money. “There is a vehicle that can be used to centralise an amount and then we can purchase it – I’ll explain it in detail later. Purchase the loan note in tranches.” 

Delia shows clear interest in the option. “You need to meet my CFO. When can you make it?” 

The middleman suggests that Global Capital chairman Paolo Catalfamo is aware of the prospective offer. “Hi chief. Spoke to Paolo. He is interested in the bonds. How do I contact your CFO?”

It remains unclear whether the investment did actually materialise. Questions sent to Delia about the matter have so far remained unanswered.

Ring-fenced properties 

The PN has already ring-fenced 10 of its village clubs inside a trust to allay fears by HSBC Bank that it would be unable to honour its loans with the bank. In 2015, the party placed 10 of these properties inside the Patria Trust, with the specific intent of selling the property within 10 years. The deed of the trust was part of a “securitisation process” in which the party raised about €2 million from the initiative. 

Delia, who was not a party official at the time, described it as a “sound and intelligent financial move” and that he might consider broadening it further. 

Placing the property in a trust means that the 10 clubs effectively no longer belong to the PN, but to the trust, of which the bank could probably be its sole beneficiary. By having the property in a trust, it is safe from being seized by the courts and would remain under the control of the trustee. 

MaltaToday previously reported that the PN had a debt of some €25 million after 2013. A repayment programme covered several outstanding debts with various banks: €3 million payable to Bank of Valletta, €7 million to HSBC, €1 million to APS Bank, the €4 million that was collected through the PN’s ‘cedoli’ loans scheme – which capital was used to repay other loans and reduce interest rates on out- standing loans; but also another €6.5 million in outstanding national insurance contributions, €2 million in pending utility bills to ARMS, and other creditors.