Government sells its shares in Tug Malta for €24.7m

The government said yesterday it has sold its shares in Tug Malta Ltd to Italian company Rimorchiatori Riuniti Genoa Spa, thus privatising the company set up in the 1980s.

At a press conference, Investments Minister Austin Gatt said the Cabinet had given the go ahead to the sale of the government's 1,080,000 shares in Tug Malta. Talks had been going on between the Privatisation Unit and the Italian company for some months after Rimorchiatori Riuniti were short-listed from among several companies that had expressed interest in buying Tug Malta.

The government owned 73.72 per cent of the shares, worth €7.22 million. Its stake in Tug Malta is being sold for €24.7 million, or 3.42 times the net asset value.

Dr Gatt said the privatisation of Tug Malta was in line with the government's policy to sell its shares in certain national companies.

The decision also had to do with the fact that Tug Malta would continue making slim profits unless it expanded its business beyond port tugging to servicing offshore activities such as oil rigs. This needed a substantial investment which the government thought should be done by a private operator, Dr Gatt said.

Rimorchiatori Riuniti has bound itself to invest about €22 million in two new tugs over the next five years. Tug Malta had six tugs that serviced Malta Freeport and Grand Harbour.

Rimorchiatori Riuniti has also promised not to transfer any of the shares it bought from the government for the next five years while binding itself to keep the 90 workers of Tug Malta. According to new collective agreement between the GWU and the company, signed yesterday, the workers will have their job guaranteed for the next 10 years and will get a pay rise.

The collective agreement covers the period between January 1, 2007 and the end of 2009.

The GWU said the agreement had been reached following months of discussions between Tug Malta and the union's maritime and aviation section, with the talks often being "long and difficult".

About 90 per cent of Tug Malta's operations had shifted to Birzebbuga from Grand Harbour with the setting up of the Malta Freeport in the 1990s.

Rimorchiatori Riuniti was set up in 1922 with its core operations taking place in the Genoa port. Between 2002 and 2006, it registered a profit of €18 million annually.