Cash-strapped Malita seeks bank funding as governance rifts deepen

Malita Investments plc, the state-backed vehicle responsible for financing social housing projects, has entered talks with lenders after running out of capital to complete three major developments, highlighting growing governance tensions around the publicly listed company.

In a late-evening announcement aimed at limiting market fallout, Malita said it had “no internal solution” to bridge a multimillion-euro funding gap on projects in Kirkop, Cospicua and Luqa. The company confirmed The Shift’s revelations that construction has halted and is now exploring new borrowing facilities as the “only remaining option” to continue works.

While Malita did not identify prospective lenders, people familiar with the matter said the government is pressing Bank of Valletta to step in. It remains unclear whether the bank will agree to extend credit to a business facing liquidity constraints despite previously securing a sizeable European Investment Bank loan.

The funding crisis comes alongside boardroom upheaval.

Malita disclosed the resignation of company secretary Albert Cilia, days after chairman Johan Farrugia resigned without explanation. Housing Minister Roderick Galdes has declined to publish Farrugia’s resignation letter.

The departures follow public criticism from former Malita Chair and Labour MEP Marlene Mizzi, who accused Galdes of interfering in the company’s management and maintaining close ties with contractors on multi-million-euro projects.

Malita, which is majority-owned by the Maltese state and trades on the Malta Stock Exchange, had been viewed as a relatively stable vehicle for delivering social housing schemes. However, internal sources said the company’s oversight began to deteriorate after responsibility for Malita shifted from Finance Minister Clyde Caruana to Galdes in mid-2024.

Officials from Galdes’s ministry and the Housing Authority were alleged to have started to interfere in contract award processes and project execution.

Malita has not commented on the causes of the funding shortfall, nor has Galdes accepted political responsibility for the company’s financial position.

Prime Minister Robert Abela has so far resisted calls for corrective action.

Since taking his seat in the cabinet, the Affordable Housing Minister has managed to significantly increase his personal property portfolio, despite declaring a modest income.