Silvio Debono wants you to lend him €65m so that he can pay back the banks and buy out his brothers

Scandal-torn developer Silvio Debono launched a bond issue two days ago, asking the public to lend him €65 million so that he can pay back the €53.5 million he owes HSBC Bank Malta on his hotel projects. He will use the remaining €9.5 million to buy his brothers out of Seabank Hotel & Catering Ltd, leaving him as the sole shareholder. His brothers Guido, Natalino and Raymond hold preferences shares in the company.

Freed of his current weighty obligations to the banks, Debono will then he able to acquire fresh bank financing for his planned development of tower blocks of flats on public land acquired from the government some weeks ago, together with a hotel under the Hardrock brand.

The original plan was for people to be asked to lend him money to develop the St George’s Bay site, but at some point this changed and people are now being asked to lend him money to sort out his bank loans instead.

This means that the €65 million which people lend him – the bond – will not be secured on the St George’s Bay project itself. But it couldn’t have been, anyway – because those flats will be sold on to third parties and cannot be held as security for the bond.