Iconic Savoy Hotel goes to Exalco Properties for €5.4 million after €12m auction win

An iconic Sliema property long left derelict for decades since it fell into disuse and disrepair, has been acquired by property group Exalco, for €5.4 million.

Exalco Finance said in a company statement that the related company Exalco Properties had acquired the Savoy Guest House on top of Rue D’Argens in Sliema for a total price of €5,438,559. Exalco Finance is the guarantor of a €15 million secured bond issue.

The Savoy Hotel had already been sold off for a whopping €12.8 million in a court auction by Almo Properties, an Exalco company, up from an asking price of €2.8 million. Another two bidders, Schembri & Sons Ltd and Ray Zammit, took part in the auction. Almo was already the 79% owner of the property, while Schembri & Sons owned a 15% stake.

In terms of the deed of sale, Exalco will set off the price due to Almo, against payables owing by the Almo to Exalco, its parent company. As a result of the set-off, Almo tendered to the purchaser receipt in full and final acquittance of the price of the property.

The Savoy Hotel had been up for auction in the preceding months when a court of appeal brought to a close a long-running legal saga between different factions of the site’s former owners and rival groups of potential buyers.

First known as Villa West End before being renovated as a hotel in 1904, the Savoy Hotel was such a landmark at the time that the area is today still known by that name. Today it is listed as a Category B+ building, with strict restrictions for its preservation.

A legal tussle between the site’s owners began in 2016, when one group, representing a majority ownership, signed a promise of sale agreement with Exalco. But a minority owner, holding 1/30th of the property rights, entered into a different agreement with lawyer Melvyn Mifsud.

Another company, Almo Properties, bought out many of the owners – on both sides, increasing the proportion of those wanting to force through the sale to Exalco to around 80%. In 2019, the company was allowed to replace the original owners in the court proceedings.

Almo has the same shareholders as Exalco, allowing the Montanaro family, owners of both Exalco and Almo, with majority ownership of the site.

A valuation by architect Elena Borg Costanzi set the price tag of the Savoy at €4.3 million, in consideration of the potential for development of four-and five-storey apartment blocks at the back to the site. Mifsud and his clients, Schembri & Sons, argued that this value was a discount on its true value.

A first court found in favour of the majority shareholders requesting the Exalco sale. The court of appeal reversed the decision, arguying that the Exalco sale had been forced by the “incestuous relationship” between the now-majority owner of the site and the proposed buyer, despite better offers. “Considering the substantial difference between the proposed sale price and the estimates offered by the opposing party, the court is of the opinion that the appellants will suffer grave prejudice if the proposed sale is authorized, and therefore the appeal deserves to be accepted.”