The government has turned down an offer by Banayoti Holdings Ltd to buy a stake in Air Malta after it found that the company’s plans did not fit in with its strategy for the national airline, the Times of Malta has learnt.

The Times of Malta is informed that the government has restarted negotiations with the European Commission to try and get the green light for possibly more State financing of the ailing national airline.

The Sunday Times of Malta reported that, during the summer months, top government officials, including Prime Minister Joseph Muscat, had discussed a possible partial sale of Air Malta to Banayoti Holdings Ltd, a UK-based company, which, according to its owner, Edward Banayoti, held substantial business interests, particularly in Canada and the US.

Asked whether the government had met with Banayoti over Air Malta, a Tourism Ministry spokeswoman said it had done so, but added that the offer was rejected.

“We can confirm that Tourism Minister Edward Zammit Lewis only met Mr Banayoti once, last July,” the spokeswoman said.

His companies would not match government plans to identify a strategic partner which can assure a positive turnaround for Air Malta”

“After the meeting, as happens with any potential investor, the government commissioned a due diligence report on Mr Banayoti and his companies, results of which clearly showed, even at a preliminary stage, that his companies would not match government plans to identify a strategic partner which can assure a positive turnaround for Air Malta,” she added.

“At no stage were there any further contacts or discussions with regard to his companies making investments in Air Malta,” she said.

A spokesman for Mr Banayoti put it differently.

While confirming that Mr Banayoti had made an official offer for Air Malta following separate discussions with the Prime Minister, his chief of staff, Keith Schembri, and senior Cabinet ministers, the spokesman said he was told to wait until discussions with Alitalia were over so that the government could start official discussions with him.

Questions on the latest government stand and on claims that the Banayoti company was involved in fraud remained unanswered.

The fact that the government has reignited negotiations with the European Commission in a bid to again get the green light to pump more money into the airline is another indication that the talks between Air Malta and Alitalia are going nowhere.

According to stringent EU rules, the government cannot hand over more funds to the airline.

The previous government managed to negotiate a €200 million injection into Air Malta tied to a five-year restructuring plan to put the airline’s finances back in the black. However, towards the end of 2013, it became apparent that the airline would not manage to reach the final targets set for 2016.

The national air carrier has yet to publish its financial results covering the last year of the restructuring plan.

 

 

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