Mercury Towers: Joseph Portelli issues new bonds to pay outstanding BOV loans

Aqra bil-Malti

Gozitan developer Joseph Portelli is seeking an additional €20 million from the public this year to help repay some of his outstanding loans with Bank of Valletta to continue work on his Mercury Towers project, as detailed in the latest bond issue prospectus published by the Malta Stock Exchange.

Through his financial vehicle, Mercury Projects Finance PLC, Portelli plans to use the new €20 million injection to cover a €5 million loan due to BOV by the end of this year. This loan is part of a total of €87 million in loans issued by BOV to Portelli for the project, with different maturity dates over the next few years.

In addition, Portelli also owes approximately €73 million in outstanding loans through bonds issued in recent years to fund the project. This amount will now increase by a further €20 million.

It is estimated that Portelli is paying around €4 million in interest annually to cover his outstanding loans.

According to financial data related to Portelli’s companies, the Mercury Towers project recorded a profit of over €5 million last year after a revaluation exercise of the company’s assets, mainly airspace, buildings, and land.

The project has outstanding loans of over €190 million but lists assets of approximately €269 million.

The project’s completion, initially scheduled for 2019, has been delayed by several years, causing buyers of small apartments to wait several months, and in some cases, years, to start using their acquisitions, particularly in the 33-floor tower.

The massive building is being developed on a property once owned by the government and previously occupied by the former telephone exchange used by Telemalta – the state telephone agency privatised in the 90s.

Born in Canada, Portelli, hailing from Nadur, has emerged as a major developer in Malta over the past decade, transforming the landscape of Maltese and Gozitan villages amid criticism.

Alongside numerous partners, particularly Mark Agius, known as Ta’ Dirjanu, and Daniel Refalo, a Comino beach concessionaire, Portelli has demolished numerous old properties and replaced them with large apartment blocks, generating substantial profits.

Portelli received favourable treatment from the Labour government, including special attention from the Planning Authority and some top officials. His company secretary and chief legal advisor is Ian Stafrace, the former CEO of the Planning Authority under the PN administration and a former associate of Prime Minister Robert Abela at his private legal firm.

Before the last general elections, Prime Minister Robert Abela attended a fundraising dinner in Gozo organised by Portelli and his associates to support the Labour Party’s electoral campaign.