Middlesea Insurance's cash call to shore up its balance sheet after a heavy haemorrhage of cash reserves, caused by the losses of no other than a bad investment in Italy, has now been guaranteed by Bank of Valletta.
This must be of concern to shareholders of Bank of Valletta who will pump €8.7 million and acquire 14.5 million new diluted shares in MSI, with a possible further €7.5 million in an underwriting guarantee agreement with msi.
Bank of Valletta's board of directors, like it or not, decided to sustain msi by increasing investment in this institution and acquire more diluted shares in this company.
Only time will tell whether this was a wise decision and every member of Bank of Valletta's board of directors must be held accountable for this investment, rather than walking away from the rights offer in the present circumstances!