Shipbuilding share transfer scrapped as MMH seeks concession changes

Plans in the already delayed 70% share transfer for the operations at the Mediterranean Maritime Hub (MMH), the site of the former shipbuilding, have been scrapped by both sides to the deal after numerous postponements.

MMH – whose ultimate beneficial owner is Paul Abela of Abel Energy – was granted the 65-year land concession by industrial parks regulator INDIS in 2016.

Since January 2023 it had been seeking to sell a 70% stake to buyers Virtu Holdings and LTV Developments that was expected to be finalised by year-end.

But the buyers were seeking a change in concession terms that would allow a wider berth of services to be offered other than the oil and gas services MMH is bound to provide. Those changes had to be approved by the government regulators.

In a company statement, MMH announced that acquirers Virtu, LTV and Elesolar had decided not to further pursue negotiations on the proposed transaction and together with MMH, had not renewed the terms of the conditional share purchase agreement.

But MMH also said it plans to evaluate conditions of its current concession “to maximise the use, output, and flexibility of the Mediterranean Maritime Hub”, adding that it wanted to ensure it is “in a position to continue to honour commitments as and when they fall due.”

MMH is obliged towards bondholders expecting annual interest payments.

The guarantor had previously said its 70% share transfer to Virtu-LTV was required for a €10 million fund transfer to restructure the group’s capital, and as stated by auditors, “to meet its financial commitments in the medium term.”

Auditors had also warned of “material uncertainty” casting doubt on MMH’s ability to continue as a going concern should the share transfer not take place, or without a change in ownership that could lead to a capital injection within a reasonable timeframe.

MMH services the oil and gas service sector with manpower and technical personnel for offshore and onshore operators, logistical support, yard operations, procurement, and technical services to oil rigs. Since 2018, the group has diversified into yachting maintenance and vessel-hoisting.

In January 2023, MMH signed a letter of intent with Virtu-LTV that was expected to culminate with a share transfer by 30 June, but the agreement was dependent on several conditions, which included the necessary authorisation from government regulators.

MMH’s concession on the land is governed by a temporary emphyteusis from the State.

Another player in the maritime field, Manoel Island Yacht Yard, made its own representations to industrial parks regulator INDIS over the attempted share transfer, which would have passed on the government concession to another private consortium.

In July 2023, MIYY sent INDIS a pointed letter to protest what it claimed were breaches in MMH’s concession terms, to its own detriment.

MIYY said that while the land at the Marsa shipbuilding area had been granted to MMH for oil and gas services, instead the company was marketing itself as a boat park for yachts despite these services not permitted by the original deed.

MIYY told INDIS it was allowing MMH full impunity to breach the deed, which was affecting its own business at Manoel Island, also a lands concession granted in a public call for offers back in 2010.