The fund that administers cash from the sale of passports is making a bid to buy a majority shareholding in Lombard Bank, sources have said.
If successful, this would be the second time the money from the Individual Investor Programme will have been used to purchase shares in a bank, after it bought up 2.91 per cent of Bank of Valletta’s shares last year for €21.8 million.
That move had been questioned by the Opposition, who held that the acquisition did not conform to the social, health and educational purposes of the fund, enshrined in law.
The National Development and Social Fund, which administers the passport cash, justified the BOV investment as falling within its duties to support major national projects, help improve business competitiveness and take initiatives for the benefit of future generations.
Any public announcements will be made at the appropriate time
The Fund recorded revenues of more than €360 million up to November 30, 2017.
The prospective sale of Lombard shares to the Fund is set to go into higher gear this week as negotiations enter a more advanced stage, according to sources.
Details are still sketchy. Asked for information, David Curmi, chairman of the Fund’s board of governors, said he was precluded from giving any information in terms of listing rules and regulations. “Any public announcements that may need to be made (if at all) will be made at the appropriate time,” he said.
About €50 million worth of Lombard shares – a 49 per cent stake owned by the Cyprus Popular Bank – were the subject of offers from about 20 bidders last year. The Cypriot bank was bailed out by the Cypriot government during the financial crisis and needs to sell its Lombard shareholding to repay taxpayers.
However, the process, which was meant to have been concluded at the end of July, has been held up. A Cypriot newspaper reported on Friday that the Maltese government was behind this delay due to Lombard’s stake in Maltapost, “an institution of public interest”. Lombard controls over 70 per cent of Maltapost through its 100 per cent subsidiary Redbox Ltd.