Auditors confirm ‘significant doubt’ on repayment of €15 million MMH bond

Auditors have warned that “significant doubt” remains over the ability of the Mediterranean Maritime Hub (MMH) to repay a €15 million bond next year, dealing a fresh blow to hundreds of small investors who financed the company almost a decade ago.

PricewaterhouseCoopers, in its audit of MMH’s long-delayed 2024 financial statements, said the group had no available cash to meet its debt obligations and highlighted material uncertainty over its ability to continue as a going concern.

“Based on our assessment, a material uncertainty exists that may cast significant doubt on the ability of the MMH Group to continue as a going concern,” the auditors stated.

The bond, which matures in October 2026, was issued in 2016 to fund the redevelopment of the former Malta Shipyards facility in Marsa.

PwC’s report indicates that, with absent fresh capital, MMH would be unable to meet its repayment obligations and could face insolvency.

The latest accounts confirm earlier reports that the company is relying on a proposed capital injection from two external investors – both existing clients – in exchange for a minority stake.

According to the financial statements, the new potential investors, which The Shift already named as tuna-farming entrepreneur Salvu Ellul, better known as Tal-Elbros, and MJK Crane Hire and Logistics, have paid a deposit of €1 million as a commitment towards the purchase of a combined 49 per cent shareholding. However, the final decision is still subject to the completion of legal and financial due diligence.

The transaction is expected to be finalised no earlier than the end of April.

The directors said they were “optimistic” that a definitive agreement would be concluded, adding that a turnaround could be achieved by 2026 if the investment proceeds.

MMH, which is majority owned by Paul Abela, a former Gozo Channel chairman, reported a loss of almost €200,000 in 2024, an improvement of about €100,000 from the loss registered in the previous year, as it sought to increase revenues from servicing the oil and gas sector.

However, the company continues to carry several million euros in accumulated liabilities and remains unable to settle them.

The latest proposed deal represents MMH’s fourth attempt to secure new investors.

Previous efforts, including discussions around the government retaking the concession, collapsed amid disagreements over compensation and adverse findings during due diligence.

The concession, awarded in 2015 by the Labour government of disgraced former prime minister Joseph Muscat, covers a strategically significant section of Malta’s Grand Harbour.

Subsequent efforts by the current administration, led by Prime Minister Robert Abela, to attract new investors into the site, including construction developers close to him, have also failed.

For bondholders, many of whom invested personal savings, the auditors’ warning underscores the precarious position of a project once touted as a cornerstone of Malta’s maritime industrial strategy.