MIDI requires government approval to sell Fort Tigné to Joseph Portelli

MIDI plc, the concessionaire responsible for the redevelopment of Manoel Island and Tigné Point, requires government consent before transferring Fort Tigné to third parties, as stipulated in the terms of its original concession agreement.

The cash-strapped company this week announced that it had entered into a promise of sale agreement with property developer Joseph Portelli for the transfer of Fort Tigné, a historic Knights-era fortification located at Tigné Point. The preliminary agreement values the asset at just €2.5 million and is subject to several conditions.

However, under the emphyteutical deed signed with the government in 2000, MIDI is prohibited from transferring assets considered part of Malta’s national heritage, including Fort Tigné, without prior government approval.

The announcement comes at a sensitive moment for the listed property development company, which is engaged in ongoing negotiations with the government over the future of Manoel Island.

Prime Minister Robert Abela has publicly declared his government’s intention to reclaim the island and convert it into a national park after MIDI failed to deliver the envisaged mixed-use development.

Sources close to the ongoing negotiations told The Shift that the sale announcement had been poorly received within government circles, describing it as ill-timed while talks over compensation remain unresolved.

“The move can be interpreted as a sign of financial pressure and despair,” the sources said. “Opening a new front involving a sensitive heritage asset complicates already complex discussions.”

MIDI has acknowledged that it is under financial strain and has warned investors that it may be unable to redeem a €50 million bond issued in 2016 without securing additional funding. The bond matures in July next year and is held by roughly 3,000 investors.

In its statement announcing the Fort Tigné preliminary agreement, the company said that any proceeds from the transaction, should it be completed, would be used to repay bondholders. The announcement did not refer to the requirement for government consent.

Asked to provide a copy of the deed, name the architects involved in the valuation at such a low price, and whether MIDI has acquired the necessary government consent to sell national heritage, the company did not reply.

Negotiations between MIDI and the state have been underway for several months.

The company has indicated it is seeking compensation reportedly exceeding €70 million to settle outstanding liabilities linked to Manoel Island.

The government has not disclosed the level of compensation it would be prepared to offer and is carrying out assessments of the expenditure claimed by the consortium.

MIDI is owned by a group of institutional and private investors, including Alf Mizzi & Sons, MAPFRE MSV Life, Gasan Enterprises, Mark Weingard and Rizzo Farrugia & Co and Finco Treasury Management on behalf of small investors. The company is listed on the Malta Stock Exchange.