Former Labour prime minister Alfred Sant on Thursday raised questions about government “subsidies” to lure US company Crane Currency to open a money-printing plant in Malta.
Writing in The Malta Independent, Dr Sant, who heads the Labour delegation in the European Parliament, said that though he had no reservations when the announcement about Crane’s investment in Malta was made, recent developments related to the sale of the company “gives rise to reservations”.
A former deputy chairman of the Malta Development Corporation (today Malta Enterprise), he said his reservations were not related to the sale of the American company itself but to the explanation given.
“We have been told that the sale was so attractive to the company that took Crane over because the deal the latter had finalised in Malta actually drove its real value to a much higher level than that shown in its audited financial accounts,” he said.
In his article, Dr Sant asked "what was going on?"
“In order to promote new industries in Malta as a member of the EU, shall we need to extend ‘subsidies’ to foreign investment that are way too high?” he added.
Asked why he was raising such comments now, when the details of the subsidies given by the Maltese government had been unearthed a long time ago, Dr Sant insisted that what he wrote was self-explanatory.
When the Crane Currency announcement was made in 2015, Prime Minister Joseph Muscat said that the company would invest over $100 million in Malta. Dr Muscat thanked his closest aide, Keith Schembri, for his involvement as “the catalyst” behind the deal personally.
Times of Malta has reported that most of the investment in the deal would be paid by the Maltese government through Malta Enterprise and subsidised loans by Bank of Valletta.
Mr Schembri owns the Kasco Group, which is also involved in the printing machinery and raw materials industries.
Crane Currency was sold for $800 million a few days ago.
The Malta plant is expected to open next year.
Malta Enterprise confidential report
“We introduced Crane to the main local banks (HSBC, BOV and FIMBank), and Bank of Valletta agreed to make available the financing required by the company.
“Assured of the government’s support to the project, we discussed the following financial arrangement with Bank of Valletta:
Plant and machinery: loan of €72 million repayable over 15 years supported by a guarantee by Malta Enterprise equivalent to 75 per cent of the loan;
Building: loan of €27 million to Malta Enterprise repayable over 20 years guaranteed by the government and a back-to-back loan by Malta Enterprise to Crane;
Working capital: €36 million of which Crane would finance 27 million and the remaining €9 million by the bank.”
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