There is no specific target date for Enemalta to present its refinancing plan, one of the main causes for its recent credit downgrade, but the Finance Ministry says it will be presented “anytime soon”.
The plan will provide comfort as to the financial viability of Enemalta
The plan was meant to be concluded by the end of 2011 but experienced delays due to time-consuming negotiations with banks, preparations of legal documents and researches by notaries.
Finance Minister Tonio Fenech said earlier this month that the plan, which will spread €400 million of the company’s debt over a 25-year period, was expected “soon”.
Asked for a more specific conclusion date, a ministry spokesman said the plan was “expected to be concluded once it is approved in Parliament” because some aspects required parliamentary approval.
When pressed for a date, the spokesman said: “Anytime soon.”
The spokesman also said that the minister invited the opposition for a formal technical presentation before the plan was presented to Parliament in the hope that consensus could be reached on the matter.
“The refinancing plan is important because it provides a long-term framework in which a clear repayment programme is entrenched. This repayment programme will provide clarity and transparency to the banks and to the regulator,” he said.
“This plan will provide comfort to rating agencies and financial institutions as to the feasibility and financial viability of Enemalta Corporation,” the spokesman said.
He added that the plan involved “very detailed and complex negotiations” with a number of banks.
It also involved complex legal documentation “that involved a lot of work”.
“Apart from the above, this refinancing plan also involved a huge amount of research in notarial archives to ensure complete correctness and transparency,” he added.
Standard & Poor’s downgraded Enemalta’s credit rating from BB to B+ in February. The agency cited volatile oil prices and Enemalta’s investment needs, poor profitability and lack of a finalised refinancing plan as key reasons for the downgrade.
Mr Fenech had admitted that the downgrade might not have happened had the refinancing plan been completed by the end of last year, as originally planned.
Labour MP Leo Brincat recently asked Mr Fenech in Parliament how the delay in the refinancing plan affected the company’s debts but the minister gave no details.
Enemalta is saddled with a debt of almost €600 million, with the interconnector between Malta and Sicily projected to cost a further €200 million.