Manoel Island negotiations stalled as tal-Franciz demands his ‘stake’

Discussions between the government and MIDI PLC on a possible out-of-court settlement regarding the return of Manoel Island to the public have stalled, as a powerful third party, which had agreed to develop the original real estate project with MIDI, is demanding significant compensation.

Multiple sources confirmed that developer Anton Camilleri, known as Tal-Franciz, through his company, AC Enterprises Ltd, is requesting that MIDI offers compensation, claiming pre-contractual liabilities, as part of a deal signed with the Manoel Island concessionaires in 2021.

They explained that Camilleri is insisting that any deal MIDI may strike with the government must factor in his part, including compensation for loss of business. The developer, considered one of the biggest on the island, is not ruling out initiating Court action against MIDI, which would completely stall discussions with the government.

Contacted by The Shift, Camilleri declined to comment as discussions were still ongoing.

On the other hand, asked to confirm legal exchanges with Tal-Franciz, a spokesman for MIDI insisted that “there is no litigation between the parties.”

However, when asked to describe the state of play on the agreement MIDI signed with Camilleri in 2021, the spokesperson did not provide an answer.

MIDI also declined to confirm whether it was requesting €70 million in compensation from taxpayers’ funds to return its concession.

“The details of the claim for consideration on paid/expenses incurred in respect of Manoel Island cannot be disclosed,” a spokesperson for MIDI said.

The Shift is informed that the government is fully aware of the dispute between MIDI and Camilleri and is following developments.

The MIDI deal

In 2021, MIDI signed a memorandum of understanding (MOU) with AC Enterprises, a company owned by Anton Camilleri, to form a joint venture to develop Manoel Island.

According to this MOU, which MIDI insists is not binding, Camilleri was going to invest millions, while MIDI was to contribute through the public land acquired through the concession.

This agreement was entered into because MIDI lacked the necessary funds to invest in the project.

Camilleri was to be the majority shareholder in the joint venture.

Years earlier, a similar agreement had been struck with Tumas Group, but it fell through in 2019.

In the summer, after deciding to initiate negotiations with the government regarding compensation for the remaining years of the concession, MIDI argued that its agreement with Camilleri was not binding and that no final agreement or transaction had been concluded.

Camilleri is insisting on a different version of events.

Bonds deadline ticking

While discussions between MIDI and the government have stalled due to Camilleri’s move, the clock is ticking on a €50 million bond that MIDI is supposed to repay to approximately 3,000 bondholders by July 2026.

If MIDI fails to reach an agreement with the government, there is a significant risk that the bond will default, as the consortium lacks the necessary funds to repay it on maturity.

Preliminary arrangements made through a bank to finance the repayment next year fell through following the government’s announcement that it would be taking back the concession.

MIDI was granted a 99-year concession to develop Tigne and Manoel Island in 1992, with a deadline of 2023 to complete the project.

However, due to a raft of problems, the Manoel Island development never commenced, and the government is now claiming a breach of contract.

MIDI refutes that it is in breach but has agreed to start discussions to hand the island back to the government.

Sources close to the negotiations are not ruling out that the disputes between MIDI, the government, and Camilleri may end up in Court, leading to years of litigation and a total standstill on the future of Manoel Island, as well as on the interests of shareholders and bondholders.