db Group, the developers behind the controversial high-rise City Centre project overlooking St George’s Bay, has sent out a letter to its creditors demanding more advantageous repayment terms.

The letter, signed by the group’s CEO Arthur Gauci, demands creditors either give its companies a five per cent discount if they want to get paid immediately or agree to a payment plan over six monthly installments.

Creditors are invited to “tick the appropriate box” and sign in the provided space to indicate their preferred option so that the payment can be activated.

The letter, dated June 10, follows on from earlier correspondence on April 13 whereby the Group requested creditors to give them time to apply for the necessary bank funding with their bankers under the Malta Development Bank COVID-19 guarantee scheme.

The payment plan applies to dues on all accounts held at Hotel San Antonio Ltd, Seabank Hotel and Catering Ltd and Sea Port Franchising Ltd.

The letter the db Group sent to its creditors.

Contacted by Times of Malta, a company spokesman insisted db Group is “amply-positioned” to withstand the impact of the COVID-19 pandemic, as evidenced by its strong liquidity ratios and balance sheet values.

“The key point is that the group’s liquidity is evidently strong. It should be enough to note that as soon as the pandemic broke out, the group paid €3 million in interests to its bond holders and retained all its staff, without resorting to any redundancies.

“This was done entirely from the group’s own cash reserves. In addition, the group continues to enjoy excellent and productive relations with its bankers.

“Evidence of this is that they continue to secure all the additional funding we require,” the spokesman said. 

He said rather than stretch out its payable obligations until the company receives money due to it, db Group took the initiative to secure the necessary funding to meet its obligations sooner.

Asked if delays were expected to the City Centre project, he said notwithstanding the group’s “strong financial position”, the company had taken a cautious approach to protect its business interests and enable it to be in a good position to sustain the investment in the project using the company’s own resources. 

“It is fundamental that planned investment is matched by available cash liquidity so that the project would be in pole position to take off once the necessary approvals are secured,” the spokesman said.

He added that it is “evidently and factually crystal clear that db Group and its subsidiaries are in a strong position to meet all their debts without resorting to bank funding.

“Should doubts be shed on this fact, and hence our commercial interests, we shall not hesitate to exercise all our rights at law,” the spokesman warned.