Shoreline hides €43 million garnishee but says 2026 bonds will be paid

The owners of Shoreline, a large real estate project in Xghajra’s Smart City, have concealed, for months, the fact that they have been under a multi-million euro garnishee order in breach of listing rules.

Despite having €43 million frozen by the Court as a result of a legal dispute with their contractors, a Turkish company named Koray Global Malta Ltd (KGML), Shoreline insists that it will still repay its outstanding bond of €14 million, which is due next year.

Legal action against several companies under the name Shoreline, including the bond guarantor, commenced last December when the Court accepted a garnishee order claimed by Koray Global Malta Ltd, alleging that they had not been paid for the construction of hundreds of apartments and the shopping mall.

The Court upheld the request and issued a €56 million garnishee order.

Shoreline Mall plc, which holds €40 million in bonds linked to the real estate project, failed to inform the market about this legal issue for six months, until June, when it issued a company announcement without disclosing the actual figures of the substantial amounts frozen.

A few weeks ago, the Court rejected Shoreline’s attempt to remove the garnishee order. Instead, the Court upheld it but reduced the amount to €43 million.

Asked why they took so much time to inform the market of the garnishee order, against stock market rules, a spokesperson for Shoreline did not reply.

However, when pressed on whether the ongoing dispute might make it extremely difficult for the company to repay the first tranche of €14 million in outstanding bonds maturing next year, Shoreline played down the issue.

“Shoreline Mall plc is currently evaluating refinancing arrangements for the repayment of the bond in 2026,” a spokesman told The Shift.

“Furthermore, Shoreline Mall plc confirms that it does not anticipate that the ongoing proceedings and/or future ones in relation to KGML will have a material impact on its ability to meet its financial obligations.”

Dubbing Koray’s legal action as “malicious”, Shoreline insisted that “this latest action follows a pattern of various attempts over the last 16 months to disrupt its operations in an attempt to extort a settlement which is not contractually due.”

The company said that it will similarly apply for the revocation of the provisional garnishee order in the coming days.

Ryan Edward Otto, a South African national, is the primary owner of the Shoreline project. Other shareholders include lawyers Kevin Deguara and Jean Carl Farrugia, who are facing separate proceedings and criminal charges related to the fraudulent hospitals heist, along with disgraced former Prime Minister Joseph Muscat, among others.

Shoreline negotiated the deal to acquire 55,000 square metres of land at Smart City during Labour’s Muscat administration, and when his chief of Staff, Keith Schembri, represented the government on the board of Smart City.

In 2007, under a PN administration, the Smart City concession was awarded to a Dubai government company to build an ICT city.

The terms of the concession have been in breach for many years, but successive administrations failed to take any action.