Issue link: https://maltatoday.uberflip.com/i/302202
maltatoday, SUNDAY, 27 APRIL 2014 6 News PAGE 1 However, the ministry said that Mizzi was "continuously aware and informed during the ongoing nego- tiations between Transport Malta and Melita Shipyard Ltd." Moreover, the ministry said that Piscopo and chief operating officer Joe Degabriele represented Transport Malta during negotiations. The ministry spokesperson added: "such agreements do not need to be sanctioned by parliament". MaltaToday is informed that Wom- an In Management Ltd, directed by Alexia King and Tracy Vella, was in- terested in teaming up with a foreign company had Transport Malta issued a call for tender. In its judicial protest, the company explained that it only got to know about the concession after MaltaTo- day revealed details of the direct order on 13 April. The company's lawyers said that the company could have possibly shown interest in the regulator's contract, but that this was not published and there- fore prevented them from competing for it. Contacted by this newspaper, the company's shareholders – RBG Fiduci- ary Services Limited – said they would prefer not to comment at this stage as they might proceed with a court case as well as infringement at EU level. Same contract awarded by tender Transport minister Joe Mizzi has stood by TM chairman James Piscopo, who had confirmed with MaltaTo- day last Sunday that Melita Shipyard was directly awarded the permit "be- cause this was an immediate, realis- able opportunity that ought not to be missed." In reply to whether Mizzi backed the decision, the ministry said "This agree- ment is similar to other agreements which were done in the past for the use of port areas." But most contracts issued by the authority are awarded through a pub- lic call for tender or an expression of interest, including a concession for a floating dock on the same site where Melita will operate their floating dock. Three years ago, Transport Malta had issued a tender for a concession agreement for a floating dock at the Outer Coal Wharf in Kordin, where entrepreneur Pierre Balzan's Melita Shipyard Ltd will now operate. In 2011, the contract was awarded to Palm Shipping, however the float- ing dock was later operated by Cassar Ship Repairs since the venture was not successful. Most Transport Malta contracts, in- cluding permits for yacht marinas in Ta Xbiex and Gozo and the ferry serv- ice connecting Sliema, Valletta and the Three Cities were all awarded after a tender was issued. The operation is expected to gen- erate a turnover in the region of €10 million annually, Piscopo said, adding that this would also have a spill-over effect for subcontractors and related services. Talking to MaltaToday, the execu- tive chairman had insisted that the 12- month agreement was similar to other agreements for use of other port areas, and renewable subject to the success of the operation and at the authority's discretion. However, although TM awarded a 12-month contract, the operator is bound by a series of long-term con- ditions, including the engagement of four apprentices for three consecutive years. Piscopo also said the operator will invest €4 million in infrastructure, equipment and upgrading of the area, and must employ 10 additional em- ployees to the current direct compli- ment in the first year. The superyacht facility in Kordin, was awarded to entrepreneur Pierre Balzan, who only last month registered a new company, Melita Shipyard Ltd. However, Piscopo would only con- firm that TM had entered into an agreement with a third party operator for the use of Outer Coal Wharf for the berthing and operation of a float- ing dock and for the provision of repair services on superyachts and marine vessels. "The initiative is directed towards addressing lack of capacity issues, in- creasing competition and is thought to be an important step towards the further development of this lucrative industry," Piscopo said. jbalzan@mediatoday.com.mt 'Relaxed' listing rules encourage issue of new bonds THE cautious Maltese savers are hungry for good investments, and not just property, but the millions in private bonds being issued by estab- lished PLCs. But observers know that the sur- prising uptake of €20 million in Medserv bonds – the successful oil logistics firm with its grand Mediter- ranean network – and another €40 million in bonds from entrepreneur Anglu Xuereb's AX Investments this year, have now encouraged two ma- jor companies to take advantage of the massive liquidity in the market. MaltaToday has been told that be- hind the easy access to the abundant liquidity on the market is the signifi- cant relaxation in the rules for the is- suing bond issues. The Malta Financial Services Au- thority chose to eliminate the strict rule obliging corporate issues to have a sinking fund. The new rules do away with the requirement for the sinking fund for many companies irrespective of the minimum subscription level and the term of the bond. This led investors in bonds to be at a distinct disadvantage compared to depositors in a bank, who have a depositor compensation scheme, mandated by EU law, even though is limited to €100,000 per depositor, per bank. The 2013 relaxation in rules, which does away with the need to have a sinking fund – a sort of 'depositor compensation' fund as guarantee – mean that companies could seek fi- nancing from the public, rather than go to banks. Under new Basel III rules, banks have been adopting more conserva- tive lending rules and restricting credit to faltering markets such as the construction business: it was ob- vious that banks were unwilling to finance certain corporate projects, especially when new bond issues were being created to actually fund previous bond issues. "It is also clear that retail investors are being safeguarded far less by the regulator with the new regime of rules for bond issues," one financial services practitioner told MaltaTo- day, on condition of anonymity. "In 2010 listing policies, there was an obligation to have a sinking fund custodian. The custodian was en- trusted to manage third-party prop- erty and release it only for what it was intended. But these rules dis- couraged companies from seeking bond issues." The original listing policies had also introduced the requirement to publish a financial soundness report, so that normal investors – so called "retail investors" – could inform themselves of the issuers' financial track record. The financial soundness report, which is composed of a due diligence report, remains a requirement under the new policy. However, only the financial analysis summary prepared by an independent stockbroker will be published as an annex to the pro- spectus, having to be updated annu- ally. "Instead of a financial soundness report, investors have a summary of the analysis – as a compromise it is updated annually, but some investors might wish to know far more about the corporate bond issuer's financial stability, especially when they are not experienced investors," the expert told MaltaToday. Mizzi says transport ministry was aware of direct order 'negotiations' New frontiers: AX Investments' forthcoming project is an elderly people's complex in Naxxar The transport ministry was "continuously aware of negotiations between TM and Melita Shipyard" Outer coal wharf (dotted box) is the area that Transport Malta decided to transfer to a private company, on a direct order. But private companies who say they could have been interested in the 12-month concession are now threatening legal action because executive chairman James Piscopo did not issue a public call for tender. PHOTO: airphotomalta.com