MIDI ‘had no option’ but to accept €43m deal, CEO says
This figure falls far short of what MIDI spent, but the company was put in a bind, Mark Portelli argues
MIDI “had no option” but to accept the government’s €43 million deal for Manoel Island and Fort Tigné, despite this being far less than the company was due, according to CEO Mark Portelli.
Writing in the Times of Malta on Sunday, Portelli said the €43 million “falls significantly short of the investment actually carried out on Manoel Island and Fort Tigné,” pointing to the government’s own audit of costs as evidence.
Portelli argued that the partial reimbursement of expenses “does not represent a concession by government”.
MIDI is set to repay a €50 million bond in July 2026.
Nevertheless, Portelli said MIDI took the “pragmatic decision” to accept the government’s proposed reimbursement, promising to lay out the full reasoning in a circular that will be sent to shareholders over the coming weeks.
Portelli argued that the government had put the company in a bind by kickstarting judicial proceedings to rescind the Manoel Island and Tigné Point concession signed in 2000.
By doing so, the government was “undermining the value of the Tigné Point properties securing the bondholders and other creditors”.
“In the circumstances, the company was left with no option other than to accept significantly less than it was rightfully due,” Portelli said.
In his comment, Portelli also rebutted several claims made in the Times of Malta supplement Corporate Times. Among other things, Portelli rejected the allegation that MIDI had defaulted on its obligations, a position the company has held since the concession first came into question.
The company was left with no option other than to accept significantly less than it was rightfully due- MIDI CEO Mark Portelli
Portelli also described the suggestion that public funds have been used to alleviate financial pressure as “false and misleading”.
Last week, Culture Minister Owen Bonnici told parliament how MIDI’s initial request of €84 million had gradually been whittled down to the final sum of €43 million as negotiations between the two sides progressed.
The government agreed to reimburse 80% of the concession’s €19 million premium for Manoel Island, arguing that MIDI had occupied the site for 25 years.
It also insisted on paying half of the expenses claimed by MIDI for various services, including office space, employee salaries and other professional fees.
Further costs were slashed when the government agreed to pay just 90% of the €12.4 million incurred to restore historical structures, to account for wear and tear.
The government’s total bill amounted to €47.3 million, which drops to €42.7 million after factoring in VAT repayments.
The deal was formally approved in parliament last week but will need to be signed off by MIDI shareholders before it comes into effect.
MIDI shareholders are set to vote on the deal on April 28.