Malta investors save Yacht Lift with last-gasp €2m bond rollover

Yacht Lift investors ‘approve’ rollover of €2m bond on the eve of its repayment
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Valletta – In a cliff-hanger that only Malta’s tightly-knit investment scene could stage, shareholders of Yacht Lift Services Malta plc voted last night to roll over a €2 million unsecured bond that was due to be redeemed this morning. The eleventh-hour decision, taken during an extraordinary general meeting held at the Grand Hotel Excelsior, means that 280 mostly Maltese bondholders will not receive the capital they had earmarked for summer plans, post-COVID catch-up holidays or, in several cases, deposits on second homes in Gozo.

Instead, the €2 million will stay inside the company for another three years at a stepped-up coupon of 5.75 %, 125 basis points higher than the original 2018 issue. “We were faced with a simple choice: either demand repayment and risk pushing the company into an insolvency process, or give management breathing space while they finish installing the new 75-ton travel-lift at Manoel Island,” explained Mark Azzopardi, a retired teacher from Żejtun who chaired the bondholders’ committee. “In Malta, we still believe in giving a local business a second chance, especially when jobs are on the line.”

The maritime-services firm, which operates the only privately-owned slipway capable of hauling super-yachts of up to 45 metres in the central Mediterranean, has seen its cash-flow squeezed by a perfect storm: pandemic-related yard closures in 2020, a 40 % spike in marine-grade steel prices and, more recently, the Ukraine war that scared off Russian oligarchs who once kept their gleaming white hulls berthed in Ta’ Xbiex every winter.

Culture of “ħobż biż-żejt” capitalism
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The rollover resonates with a peculiarly Maltese form of micro-capitalism: retirees placing life-savings into unlisted companies run by neighbours they meet at the local każin, trusting that dividends will finance First-Communion parties and weddings. Yacht Lift’s bond prospectus was originally marketed through colourful flyers left on windscreens outside the Marsa yacht marina and via Facebook groups such as “Malta Boat Lovers”. Minimum subscription was just €2,000, deliberately low enough to allow pensioners to take part.

Yet the same intimacy also means defaults hit harder. When Sea Malta’s ferry bonds collapsed in 2006, parish churches in Senglea and Cospicua organised collection boxes to help elderly investors. That memory still haunts the national psyche. Finance Minister Clyde Caruana, himself a former shipyard worker from the Three Cities, welcomed the rollover as “responsible solidarity” but warned that “the culture of buying local bonds like raffle tickets must evolve; retail investors should demand the same transparency expected on the Milan stock exchange.”

Community impact: jobs, heritage, skyline
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Yacht Lift directly employs 42 Maltese welders, carpenters and marine surveyors, plus another 60 subcontractors who live within a 5-kilometre radius of the Manoel Island yard. Had the bond been called, administrators would almost certainly have auctioned the 200-year-old sandstone quarry that the company leases from the Midi plc consortium. That site, carved out by the Knights of St John to build Valletta’s fortifications, is zoned for low-rise maritime use but coveted by developers eyeing boutique hotels. “If the slipway closes, another piece of our industrial shoreline is lost,” lamented Claire Bonello, president of Flimkien għal Ambjent Aħjar. “Rolling the bond is not just about money; it is about keeping traditional trades alive within the Unesco buffer zone.”

Smaller creditors feel the pinch
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Not everyone applauded. Maria Camilleri, 68, a former lace-maker from Żabbar, attended the meeting clutching a medical quotation for her husband’s cataract surgery. “We needed that capital now,” she whispered. Under the new terms, early redemption is allowed only on death or certified critical illness, and even then subject to 90-days’ notice. “It feels like they locked the gate after we entered,” she said, echoing unease among investors who depend on the bond’s €1,000 quarterly interest to supplement Malta’s modest state pension.

Looking ahead
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CEO Gordon Grech told shareholders that a €600,000 EU resilience grant, approved in Brussels last week, will co-finance the new eco-friendly lift, allowing the yard to service hybrid super-yachts by 2025. Forward bookings for next season are already 30 % above pre-COVID levels, he claimed, driven by Americans rerouting away from the French Riviera. If true, the rollover may prove a masterstroke; if not, Malta’s courts could soon face another emotional creditors’ queue reminiscent of the 2019 Café Premier collapse.

For now, the island has postponed that reckoning. As investors filed out beneath the bastions where Caravaggio once drank, one could almost hear the collective sigh: “Nagħmlu ħilitna, naraw x’jiġi.” We do our best, we’ll see what comes. In Malta, that mixture of prudence and optimism remains the most valuable currency of all.