GlobalCapital acquisition on Mauritius administrator’s radar

GlobalCapital’s intention to have Italian banker Paolo Catalfamo take over 48% of its shares, which are held by embattled British-American Insurance of Mauritius (BAI), has attracted the attention of Mauritius’s special administrator, currently overseeing the nationalisation of BAI.

Catalfamo was formerly an honorary consul-general for Mauritius in Italy, and an acquaintance of BAI’s Dawood Rawat – the former GlobalCapital chairman who has been accused in Mauritius of running a €960 million Ponzi scheme through one of his subsidiaries, the Bramer Banking Corporation. Bramer’s 30,000 deposit accounts were taken over by the State Bank of Mauritius.

According to reports in the Mauritian press, BAI’s administrator, Yacoob Ramtoola, who is the chief executive officer of auditors BDO, has scheduled a visit to Malta for talks with the Malta Financial Services Authority over EIP’s plans to acquire the BAI stake.

Ramtoola was reported to have tasked himself with seeking assurances that Catalfamo’s acquisition will be at a fair price, due to the Italian’s acquaintance with the Rawat family. LeMauricien.com, a Mauritius newspaper that has covered the BAI debacle extensively, has reported a low offer of just €4.6 million for the BAI shareholding.

Catalfamo’s company EIP plc, which is registered in Malta, has elected to take over BAI’s 48.5% ownership of GlobalCapital. Rawat resigned the GlobalCapital chairmanship since the start of investigations against him, and was replaced by Joseph R. Aquilina.

EIP’s acquisition, whose purchase price has not been made public, is subject to regulatory approval. 

EIP also intends to raise additional equity “from potential new investors known to EIP” to participate in a €15 million rights issue sometime in January 2016, which is necessary for GlobalCapital to repay a €17 million bond issue.

GlobalCapital’s directors said they are also actively considering “other financing options potentially available to the group” in order to honour the bond redemption.

But auditors Deloitte have expressed doubts about EIP’s plans to take over BAI’s  shareholding.

“The success of these plans, which is fully dependent on funding from external investors, can only be determined at a future date. These circumstances indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern,” Deloitte said in GlobalCapital’s annual report.

After reporting their first profit in seven years, of €222,671 thanks to an “aggressive transformation strategy” of cost-reduction, GlobalCapital is now reporting that it is in advanced negotiations with potential buyers “to dispose of other excess property”.

Their portfolio includes the bizarre acquisition of the 12th century castle in Collalto Sabino, 50km outside of Rome, valued on the books at around €5.5 million, which is actually 25% of the investment property portfolio.

The baronial castle was reported to have been acquired by GlobalCapital in 2013 for €8.6 million, according to Italian real estate online Il Quotidiano Immobiliare. But property realtor Knights Frank has tagged the nine-bedroom castle – once occupied by Cardinal Barberini, a nephew of Pope Urban VII – at €6.8 million.

Mauritian prime minister Anerood Jugnauth has accused Dawood Rawat of using BAI’s policyholders’ cash to purchase the Italian residence to be used as a hotel and spa for his own family’s vacation plans.