GO plc sets up SPV holding properties valued at €50 million

MORE Qawra land transfer sweetens GO shareholders' bitter pill

GO plc chairman Deepak Padmanabhan and chief executive David Kay have had to fend off heavy criticism by numerous shareholders who have questioned the company's overall loss of €45.2 million in Greek subsidiary Forthnet, stressing that the telecommunications firm was now addressing the matter and future prospects looked "resilient, positive and profitable."

Describing the losses as a "major concern" for all, Padmanabhan said that during last year's AGM, shareholders were told that 2011 could be expected to be a "challenging one."

"The Greek investment was made by GO plc in 2008 as the Maltese market did not offer enough protection," Padmanabhan said, justifying the investment in the Greek subsidiary that suffered heavily in the financial crisis that has gutted the ailing eurozone member.

Padmanabhan said the Greek investment looked "promising" and it was only midway in 2010 that the full scale of the Greek crisis hit hard and affected the investment held at Forthnet.

According to the chairman, the board had taken the decision to invest in Greece after consulting with Credit Suisse and Meryll Lynch, "but I or my board don't have a crystal ball to foresee the future."

Padmanabhan was contested by shareholders who insisted that he "tells the truth" about the Greek investment, when his alleged remark on Malta being a "limited market" for investment appeared to irk his audience.

"How can you say that? I don't think that Tecom came to Malta because the market was limited and there was no growth in sight," one shareholder told Padmanabhan.

Padmanabhan stressed that despite this losses, the company has engaged in an ambitious cost-cutting exercise, and GO managed to keep its turnover stable, with only a marginal decrease from €132.3 million in 2010 to €131.6 million in 2011.

He said GO plc was now "incumbent" as a quad-band player, was investing in innovation and best service to customers.

Padmanabhan said that as an executive chairman, he has declined to take a salary since his appointment, and heeded the recommendation by a number of shareholders who called on the board to accept a lesser pay in the wake of the financial results and no dividends paid to shareholders this year.

"I will put that question to the board, and see what they say" the chairman said, adding that the salaries the board and senior company executives are paid, reflect the market and size of the company.

Shareholders have voiced their concerns at the company's majority shareholder who takes the decisions over investments without being legally required to consult with the minority shareholders.

"We cannot accept this situation," one shareholder told the AGM, adding that "you people up there have made a mess of our investments."

Meanwhile, Padmanabhan and Kay refused to express their opinion on the company's current share price. "We cannot speak on market behaviour," they both said.

Later in the day, GO presided over the official transfer of the land in Qawra in exchange for the legal titles of 11 telephone exchanges, that are now part of a €50 million property holding company the telecommunications firm.

GO plc has outstanding bank loans of €69 million which must be paid up by 2015. However, according to chief financial officer Edmond Brincat the company has the ability to pay the loan as visibility for the next 24 months is good. "While negotiations are currently underway with the banks over a repayment programme, an offer is on the table and is being considered by the board."