We have obtained an internal letter signed by Koray Global Malta, the Turkish contractor currently involved in arbitration proceedings against Shoreline Mall over an unpaid bill amounting up to €56 million. You can find the letter here.
The letter accuses Shoreline shareholders, primarily Kevin Deguara, Jean Carl Sammut and Ryan Otto, of using project revenues to repay intercompany debts issued between their own companies, which were used to finance the project’s operating costs and expenditure.
Essentially, the letter corroborates our investigation that the Shoreline shareholders created a highly layered corporate structure to obscure the true extent of the project’s debt burden and secure additional financing from banks and the capital markets. Koray has also initiated arbitration proceedings against Shoreline before the International Chamber of Commerce.
Separately, another letter sent to us exclusively by a major local creditor states that the project’s bondholders mainly consist of four major local financial and banking institutions, all of which are deeply concerned about recovering their investment. Bank of Valletta is also exposed as a creditor, although the extent of its exposure remains unclear.
Shoreline shareholder Ryan Otto, who initially invested up to €1 .1 million in the project and is understood to be the only shareholder to have contributed significant personal capital, is also seeking to exit the project and is currently in dispute with Jean Carl Farrugia and Kevin Deguara. A legal battle between Ryan Otto and Kevin Deguara and Jean Carl Farrugia is also looming.
The situation can best be described as a rush for the exit, with that exit narrowing by the day as Shoreline continues to burn through its operating income in an effort to stay afloat. Any meaningful restructuring of the company’s debts will almost certainly require a substantial injection of fresh capital, which, at this stage, is nowhere to be seen.
At present, the project appears to be heading towards collapse, with creditors facing the prospect of significant losses on their investment.
If that happens, Shoreline would become the second government-backed real estate megaproject to fail, following the disastruous MIDI development at Manoel Island.
Website Editor
Historian and Publisher
Leave a Reply