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MT 28 January 2018

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YANNICK PACE A larger percentage of the money spent by families and individuals living in rented properties, is being taken up by rent, rather than other daily expenses, when compared with households that own their homes. The findings of the latest household budgetary survey (HBS) has now con- firmed that in 2015, while property own- ers have benefited from the decrease in energy prices mandated by the Labour ad- ministration, those who had been renting a home have seen a drastic rise in rental expenses. Rental prices skyrocketed in recent years, with access to affordable accommodation, now coming to the forefront in the nation- al political discourse. In fact, the National Statistics Office's survey found that in 2015, 18.6% of house- hold expenditure in rented dwellings was spent on "housing, water, electricity, gas and other fuels". But that amount was significantly lower for property owners, where 6.9% of ex- penditure went to hous- ing costs. 14 15 Newspaper post maltatoday today today SUNDAY • 28 JANUARY 2018 • ISSUE 951 • PUBLISHED EVERY WEDNESDAY AND SUNDAY YOUR FIRST READ AND CLICK OF THE DAY WWW.MALTATODAY.COM.MT INTERVIEW Sara Ezabe Household survey confirms: rental hike is leaving people behind Refusals from Allianz, Deutsche Bank left Vitals with no choice but to sell MATTHEW VELLA VITALS Global Healthcare, the investors hand-picked by the Labour administra- tion for a hospitals privatisation project, were rebuffed by major credit institutions in their bid to secure finance to take their project forward. It was only towards the end of Novem- ber, that VGH had its back to its wall and decided it had no option but to sell out to Steward Health Care, the American private healthcare giant. Early on in 2017, a planned bond issue with Allianz, the German financial ser- vices provider, failed to pick up steam. By then the company was plagued with a lot of negative attention in the press in the run- up to the snap elections called in May. After the election, VGH once again start- ed looking for the millions it needed to take the hospitals project forward. Towards the end of the year, a possible lifeline appeared in the form of finance from Deutsche Bank. But even here, the capital failed to materi- alise, leaving VGH stranded. But the company – whose shareholders include fund manager Mark Pawley and its Canadian director Ram Tumuluri – was early on in 2017 already being targeted for the possible sale of a stake to Steward, which is itself owned by American asset gi- ant Cerberus Capital Management. One of Steward's former chief officers, Armin Ernst – who occupied the role of Vi- tals CEO up until his departure earlier in 2017 – had mooted the possibility of Stew- ard joining VGH as a partner in the project. A government source who spoke to this newspaper confirmed that Ernst actually suggested the prospect with the govern- ment in the summer of 2017, possibly with- out having informed VGH. "The government knew then that VGH was finding it problematic to secure fi- nance for the concession, and Steward was ready to step in. But the VGH shareholders were wary, because they knew that Steward would seek a buy-out. They opposed the of- fer because they did not want to see their shareholding diluted," the government source said. It was only towards November, after the ultimate rebuff from Deutsche Bank, that VGH found it had no option but to sell out. In December, VGH took out a €900,000 loan from Agribank plc. Steward Health Care are now expected to take over the 30-year concession from VGH on Monday, tomorrow. The hospitals privatisation is now a major subject of controversy after it was revealed that the Labour administration carried out a selection process for such a major privati- sation, when it had already signed a memo- randum of understanding with the selected company. Vitals Global Healthcare was created af- ter a group of investors, as well as a group of Pakistani entrepreneurs, secured an MOU from the Maltese government to take over three state hospitals. Five months before the public request for proposals was issued, the investors behind Bluestone Malta had signed an agreement in November 2014 showing they already knew they would be taking over the Gozo and St Luke's hospitals. Steward had already approached government in mid-2017 to moot partnership but Vitals shareholders balked at prospect of American giant taking over Not only a Queen's Leaders award winner, but now one of Forbes's '30 Under 30' honorees in law and policy Malta's wealth gap PG 10 PAGE 3 €1.75 today YOUR FREE COPY WITH MALTATODAY Starting this month, THINK - the University of Malta magazine of ideas and research The 16-year- olds voting in the 2019 European elections 4 GENERATION EUROPE Housing and transport costs as a percentage of total household spending Property owners Tenants 2008 7.5% 11.2% 2015 6.9% 18% the hospitals project forward. Towards the

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