“Have a drink, Chris”: BANKRUPT GASOL PULLS OUT OF ELECTROGAS MALTA

Gasol (Malta) Ltd, a wholly-owned subsidiary of the technically bankrupt Gasol plc, has pulled out of Electrogas Malta Ltd, the beleaguered company which has yet to build Konrad Mizzi’s power station five months past his deadline date of March this year.

This website reported this morning that Gasol is technically bankrupt and that its troubles are so great – it has accumulated debts of €96 million – that it has had to resort to borrowing US$1 million from its fellow shareholder’s subsidiary Socar Trading South Africa to pay for its most pressing bills. It put up shares in itself as security for the loan.

Electrogas Malta announced this afternoon that Gasol is pulling out and that the remaining three shareholders – Siemens, Socar Trading SA (the State Oil Company of Azerbaijan) and the Maltese GEM Holdings Ltd – will adjust their respective holdings so that each will now hold 33.33%, instead of bringing in a new shareholder to replace Gasol.

Gasol’s stake is 30%, as is GEM Holdings Ltd’s. Siemens and Socar hold 20% each.

In its statement a short while ago, Electrogas Malta said: “The rearrangement of existing partners within the consortium is being done to maintain the long-term stability of the project company which will supply energy and natural gas in accordance with its commitments to Enemalta and all stakeholders.

“ElectroGas Malta remains fully committed to its obligations to deliver the project that will introduce natural gas for power production in Malta, and all the environmental benefits associated with it, within the agreed timeframes.”

In the last two years, Electrogas Malta Ltd has failed to raise the finance required to build the power station, and has wasted all this time trying to find the money instead of building it, with government politicians and Electrogas Malta officials fobbing off press questions and saying that everything is hunky-dory when it was quite patently not.

When it became clear that raising the finance was impossible, the government directed the Bank of Valletta to lend Electrogas Malta €101 million, committing itself to make good for it with public money and public property to a maximum of €88 million should Electrogas Malta default on the loan.

The government has turned down a Freedom of Information request by The Malta Independent on Sunday for the publication of the terms of agreement under which it guaranteed the loan, saying that if the details are made public, this would have “a substantial adverse effect on the ability of the government to manage the Maltese economy”, that it would “potentially create turmoil in the economy”, and that it would “have a substantial adverse effect on the financial or property interests of the government or of another public authority”.

The government reacted to the news this evening by releasing a Through-The-Looking-Glass statement to the press, in which it failed to so much as mention Gasol:

“Government welcomes positively the consolidation of the Electrogas Malta Consortium and the ongoing and now increased commitment shown by Siemens, Socar Trading SA and Gem holdings LTD.

As part of this consolidation, these three companies have increased their shareholding in Electrogas Malta and have demonstrated their commitment to the project. All three partners will have equal shareholding in Electrogas Malta with Siemens as the Lead Member.

The increase in shareholding by two world-class corporations and a leading Maltese holding company shows the importance these companies attribute to the project.

The project commitments remain unchanged and the momentum is being sustained in the development phase.

The implementation of this major investment will not only result in economic benefits as outlined by credit rating agencies but also in significant environmental benefits and the reduction of emissions.”