Financial experts have been brought in to draw up a plan to solve the PN’s debt crisis, which is putting a €2 million strain annually on the party’s cashflows.

Party sources said the €32 million debt, recently revealed by PN leader Bernard Grech, impacts the party’s day-to-day operations.

The insiders said the party starts every single year knowing it has to set aside €2 million just to keep up with its debt repayments.

“People deserve to know the limiting factors the party is facing”- PN source

These €2 million in debt repayments are over and above the costs of the party’s day-to-day operations and severely hamper its ability to build an effective election war chest.

PN's media arm used to lose millions

One PN official told Times of Malta the party had only started taking its debt problem seriously after 2013.

The party’s media arm in particular used to lose “millions” prior to 2013. For a period after the March 2013 election, the PN even struggled to pay its employees for months on end.

Since then, Media.Link’s staff headcount has been halved from 200 to 100 and the annual losses have been reduced to around €200,000 from €300,000, according to the PN official.

Media.Link last audited accounts date back to 2004. The party insider said going back to 2004 to build a clear picture of the company’s annual cash movements had proven “difficult”.

According to the party official, the aim is to turn Media.Link into a viable entity rather than shut it down. Apart from turning Media.Link around, the party is also discussing a plan with the financial experts on how to tackle the €32 million debt problem.

Further commercialisation of the various PN clubs dotted around Malta and Gozo is one of the options on the table to bolster the party’s cash flows.

Grech’s upfront assessment about the debt situation sparked concern among party employees about their own and the party’s future.

The PN insider said Grech had decided honesty was the best policy.

“People deserve to know the limiting factors the party is facing”, the PN source said.

The opposition party is not the only one facing a debt crisis. According to Illum, Labour’s media house is €10 million in the red. Both parties are known to owe the government millions in tax, VAT and energy bill arrears.

Independent journalism costs money. Support Times of Malta for the price of a coffee.

Support Us