Qawra land transfer sweetens GO shareholders’ bitter pill

Telecommunications company GO plc has formally transferred a contested piece of land in Qawra, which it inherited in the acquisition of the national telecoms corporation Maltacom in 2006, to government after years of negotiations over the land's legal title.

Controversy over whether the land should have even been passed on to Tecom, the Dubai investment giant that acquired Maltacom, had been a political issue raised in parliament many times by the Opposition.

Finance minister Tonio Fenech told the media during the signing of the deed, that the original land transfer was "never an oversight", insisting the land was Maltcom's property but legal research to complete the transfer to government had taken years to compile.

"The value of the land is estimated at €13.8 million," Fenech said. "So far, government has no plans for its use, but it will become part of its property portfolio."

GO plc - which today faced a rowdy shareholders' meeting over the financial troubles in a Greek subsidiary - transferred the Qawra land back to the government in exchange for 11 telephone exchanges across the island, which will now be included in a special purpose vehicle set-up by the company in the past weeks.

GO's special purpose vehicle - Malta Property Holdings - is now worth €50 million in total with all the telecommunications companies' lands.

Earlier on, GO chief financial officer Edmond Brincat explained to shareholders at the company's AGM, that the Qawra land would be exchanged for the 11 properties which GO was using but had no legal title over them.

Brincat said these were "strategic properties, of a combined value that is higher than the Qawra land. With this deal we are protecting our abilities for next 20 years."

The announcement during the AGM, in which angry shareholders also managed to elect a GO employee to the board of directors, sweetened the bitter pill of Forthnet's €45 million losses in Greece, with the consequence that no dividends were paid to shareholders.

Brincat said GO is now out to obtain the "best Mepa permits possible" to use the buildings accordingly, straying however from questions on whether the properties will be sold, leased out or developed. He said the board of directors will engage experts to seek advice.

The Forthnest debacle led shareholders to file six resolutions, one of which was an unsuccesful vote of no-confidence in the present board of directors and senior management executives.

The shareholders called for a discussion on the decision to skip dividend payment for 2011, and instead enact a revised dividend policy based on the annual cash surpluses of the company. They also asked, unsuccessfully, to consider including the necessary resolution to enable the company to adopt a share buy-back programme.

Other resolutions called on the board to seek approval of at least 75% of shareholders before any further investments in Forgendo or Forthnet or any such other foreign investment.

Joseph Agius, the chairman of the second largest shareholder in GO - the Maltacom Employees Foundation, which has 3 million shares - was elected to the board of directors, together with Paul Fenech, of Sterling Jewellers, and Paul Testaferrata Moroni Viani, a non-executive director at HSBC Malta.