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Government agrees to guarantee Crane Currency loans needed for machinery and equipment

The American currency printer plans to open a state-of-the art facility in Ħal Far

From left: Annemarie Watson, president, International Currency at Crane Currency, US Ambassador Kathleen Hill, Prime Minister Joseph Muscat and Crane Currency CEO Stephen DeFalco at Wednesday’s ceremony at the US company’s yet-to-be-built facility. Photo: Chris Sant FournierFrom left: Annemarie Watson, president, International Currency at Crane Currency, US Ambassador Kathleen Hill, Prime Minister Joseph Muscat and Crane Currency CEO Stephen DeFalco at Wednesday’s ceremony at the US company’s yet-to-be-built facility. Photo: Chris Sant Fournier

Malta Enterprise and the government have committed taxpayers to a financial exposure of €81 million to lure Crane Currency to Malta, The Sunday Times of Malta can reveal.

The American currency printer plans to open a state-of-the art facility and employ 300 people over a number of years.

Both the government and Malta Enterprise have officially declined to give any information on the incentives allocated to Crane Currency, citing “secret and confidential” reasons.

However, this newspaper is informed that apart from financing the €27 million tailor-made factory in Ħal Far, the government has also agreed to guarantee most of the loans needed by Crane to buy its machinery and plant equipment. It will also subsidise the interest rates to be paid on these same loans.

Malta Enterprise and the government will in fact guarantee 75 per cent of a loan of €72 million (equivalent to €54 million) to be given to Crane to finance the company’s investment in the plant, machinery, equipment and installations.

Over and above, Crane will be getting an interest subsidy of up to three per cent on the loan provided by Bank of Valletta.

The government agreed to allocate an industrial space of 25,500 square metres at Ħal Far on which the new factory will be built.  Malta Enterprise will build the factory through a loan of €27 million obtained from Bank of Valletta. The idea is that Crane will then rent out the facility from the government.

We are dealing with the third largest security printing company

Malta Enterprise was warned in a review of the project that its exposure of €81 million (€27 million + €54 million) for Crane Currency “was on the high side”. However, the State agency’s officials were told by government experts that “the fact that we are dealing with the third largest security printing company that is responsible for the provision of security paper and features to the US government for the printing of US currency, gives one the comfort that the company will be able to meet its commitments”.

However, due to the high exposure of the Maltese government, Malta Enterprise was advised to seek, as a condition of acceptance, a written undertaking by the parent company in the US “equivalent to the amount to which Malta Enterprise is exposed”, sources have told this newspaper.

The government also justified the high exposure by citing the significant long-term benefits expected to be reaped by the economy.

Among these are “the creation of some 300 new employment opportunities and the generation of tax revenues from the company’s profits and wages to employees”.

Other significant benefits “arise from Crane’s expenditure on raw materials obtained from Maltese suppliers and the domestic expenditure by Crane’s employees,” Malta Enterprise was told.

Although Malta Enterprise has refused to give this newspaper any information on the incentives afforded to Crane Currency, The Sunday Times of Malta is informed that similar deals have been entered into in the past years including with Lufthansa Teknik, which is now providing jobs to some 600 employees.

The hangars for Lufthansa were built by the government on condition that these are rented to the German company.

However, according to the sources, Crane Currency was given a “much faster and wider incentive” than normally allocated to similar or smaller projects.

The announcement of Crane Currency’s $100 million investment in Malta was made by Prime Minster Joseph Muscat last September from Boston, the US, while signing an agreement with Stephen DeFalco, Crane’s CEO.

Questions were immediately raised over the deal, particularly due to the involvement of Keith Schembri, the Prime Minister’s chief of staff and also the owner of Kasco Trading – an agent in Malta for printing equipment and the supply of paper.

Although, while in Boston, Dr Muscat had described his right-hand man as “the catalyst” behind the Crane Currency deal, he later said that Mr Schembri played no role in the actual negations but only “facilitated” the deal.

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