BOV grants Malita a €28 million lifeline loan to restart stalled housing projects

Bank of Valletta has approved a fresh €28 million loan to Malita Investments plc, offering a crucial financial lifeline to the government-controlled company after work on several social housing projects ground to a halt when funds dried up last year.

The new financing, disclosed in Malita’s latest financial statements, is intended to support the completion of three stalled housing developments in Ħal Farruġ, Luqa, Kirkop and Bormla, which were suspended amid a severe liquidity crisis that pushed the publicly listed company to the brink of insolvency.

Malita’s new CEO, Marlene Attard, has so far declined to provide details about the arrangement.

However, the company’s annual report confirms that Bank of Valletta, itself indirectly controlled by the government, sanctioned the €28 million facility after the reporting date.

According to the directors’ report, the loan forms part of “the overall funding structure supporting the project”, together with another €22 million financing package from the European Investment Bank secured in 2024 but not yet utilised.

The report states that “drawdown under these two facilities is conditional upon the prior written consent of the institutional lenders of the Company so that the related security for the new facility can be put in place.”

Sources close to the company indicated to The Shift that the Finance Ministry played a central role in facilitating the latest agreement with BOV. However, it remains unclear what guarantees or collateral the bank requested before approving the financing. The possible involvement of state guarantees is also expected to raise further questions about the potential implications of state aid.

The emergency funding comes as Malita struggles to recover from a dramatic financial collapse that wiped out shareholder returns and exposed years of alleged political interference and mismanagement.

Last week, The Shift reported how minority shareholders were once again left carrying the burden of the company’s deteriorating financial position after Malita announced it would not issue dividends for a second consecutive year.

The latest accounts show the company registered an operating loss of more than €2.5 million for 2025, a sharp reversal from the profit exceeding €10 million reported the previous year.

Many small investors had originally bought into Malita on the promise of stable annual returns backed by government-linked assets. Instead, they now face mounting losses as the company becomes increasingly dependent on external financing to stay afloat.

The stalled social housing developments have become one of the clearest symbols of the company’s crisis.

Projects intended to provide accommodation for vulnerable families have remained inactive for months after construction funds were exhausted.

In Bormla, some prospective tenants had already been informed by former minister Roderick Galdes before the 2022 general election that they would be allocated apartments. The units, however, remain unfinished years later.

Malita, now chaired by Roderick Psaila, has acknowledged that construction works cannot restart until all financing approvals are in place, underlining the fragile state of the company’s finances.

The financial turmoil has also reignited longstanding governance concerns surrounding the state-backed company.

Former chairperson Marlene Mizzi, a former Labour MEP, had publicly accused Galdes of interfering in the company’s operations and maintaining close relationships with contractors involved in the projects. The allegations were never fully investigated.

Subsequent reports also revealed that Galdes later acquired property from one of the same contractors at prices considered below market value, further fuelling concerns about conflicts of interest and sleaze.