The ‘real deal’ may cost taxpayers another €36 million as Steward files for bankruptcy

'Bank of Valletta issued the loan to Steward Health Care only after the government gave its full guarantee'

 

Taxpayers will have to foot the bill for a €36 million loan Bank of Valletta gave to the concessionaire in the hospitals’ privatisation deal, a senior official at the bank told The Shift while explaining that the bank’s risk was covered.

“The bank issued the loan to Steward Health Care only after the government gave its full guarantee. Thus,  in  the case of Steward’s bankruptcy, BOV is still fully covered as the government will be forced to make up for any shortfall.”

This is in addition to the hundreds of millions the government has already spent during the concession’s term, estimated at €400 million.

Steward Health Care, the owner of the government’s “fraudulent” hospital concession, has filed for bankruptcy in the US, declaring a staggering $9 billion in debts and liabilities.

BOV sources told The Shift that the bank is “not worried about the implications of this bankruptcy”.

“The bank is very well covered on this loan despite all the uninformed comments in the media, including by politicians,” a senior official said.

The official said this meant the loans would be repaid in full, interests included, through taxpayers’ funds.

“That is not a concern for the bank. Politicians made these decisions, and they should answer them. BOV still acted correctly,” he said.

The government guarantee was signed by former finance minister Edward Scicluna and his Permanent Secretary Alfred Camilleri, who now faces criminal charges.

Following last Monday’s filing for bankruptcy in the US, Steward Health Care has now put all of its 32 hospitals for sale in an attempt to shore up funds to pay its debts.

Court documents filed in Massachusetts show that Steward Health Care’s liabilities include $1.2 billion in loans, $6.6 billion in long-term rent obligations, $1 billion in unpaid bills from medical vendors and suppliers, and $290 million in employee wages and benefits.

In 2018, days before he visited Steward Health Care’s headquarters in Boston, Chris Fearne told a Labour Party conference that Steward’s Gozo Hospital would be better than Malta’s main hospital, Mater Dei.

Neither VGH nor Steward has ever come up with any investment to build a new Gozo General Hospital as obliged in the original 30-year concession signed in 2015 by disgraced former prime minister Joseph Muscat.

Despite Steward Health Care missing all deadlines, the government continued to pay them tens of millions of euro annually.

An investigation conducted by OCCRP, The Shift, and The Times of Malta showed those millions went straight into the pockets of so-called investors, who lived the high life off Maltese taxpayers’ backs.

Deputy Prime Minister Chris Fearne resigned yesterday in the wake of charges he faces in relation to the magisterial inquiry into the privatisation of three of Malta’s public hospitals.

                           

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8 Comments
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Mick
Mick
10 days ago

“The official said this meant the loans would be repaid in full, interests included, through taxpayers’ funds.” Well fuck me, not only do we get mugged by Maltese politicians and their dodgy “habibs” but we’re now liable to cover the bank loans, Scicluna has some shit to answer for, just hope they’ve confiscated all his bank accounts.

Last edited 10 days ago by Mick
Carmelo borg
10 days ago

Prosit ghalinqas AHNA is small investors (SHARE HOLDERS) tal BOV MA AHNIEX HA NAGHMLU TAJJEB TORT TA SCICLUNA U CAMILLERI. VERU LI XORTA HA INKONNA NOHORGU UKOLL BIT TAXXI,

Saviour Cortis
Saviour Cortis
9 days ago
Reply to  Carmelo borg

Min zbalja ihallas. Kien jaf il konsegwenzi ghax qilu snin avzat mill poplu. Buzzed ghamlu 100biljun dejn, dawn jonqos Issa.

KLAUS
KLAUS
10 days ago

I could cry. It is so deeply heartbreaking.

At the end Maltese people pay with their health and life just because a Mafia Group was getting extremely greedy.

Noel Ciantar
Noel Ciantar
10 days ago

While many Labour voters are happily cashing their electoral bribe cheques of 100 Euros, their children are being burdened with a Children’s Tax of 36 million Euros which will be added to the national debt.

Labour continues to claim that they did not introduce new taxes, but they are hiding their corruption taxes in the national debt for future generations to pay.

J portelli
J portelli
9 days ago

BOV just awarded more than Eur 440,000 as a golden handshake to a manager risk assessor as joins a government post. Did his risk assessment include these 30.million at risk? Was he involved in the taken risk where BOV lost 70 million as a bad investment in Italy? If yes, he was, then he deserves no handshske. Risking a 100 million is shareholders dividend should be considered a disaster, not golden farewell

Carmel Sammut
Carmel Sammut
9 days ago

Chris Fearne is innocent eh?!? Malta won the Eurovision song contest…and Chris Fearne is innocent eh?!?

Zhuhsi
Zhuhsi
8 days ago

A good banker would only look to the guarantee as a last resort, So, the question is whether BOV did the necessary due diligence to ascertain that Steward had the wherewithal to meet its obligations, without resorting to the guarantee. This is especially important as it becomes apparent that the Government seems to be quite cavalier in the manner in which it is dispensing guarantees,

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