24 - 30 August 2000

Management buyout possibility for Maltacom

by Anthony Manduca

and David Kelleher

With the government expected to make an announcement on the privatisation of Maltacom by next November's budget, reliable sources have told The Malta Business Weekly that a group of senior managers at Maltacom headed by the non-executive chairman, Maurice Zarb Adami, have been working on a plan to propose a management buyout to government.

This group includes several of the company's consultants and it is understood that initial financing from a leading European bank has already been secured. Contacted by this newspaper for his comments on the matter, Josef Bonnici, the Minister for Economic Services, whose ministerial responsibility includes Maltacom, simply replied: "It is too early to comment on such a matter."

Last year's White Paper entitled "Privatisation, A Strategy For The Future," which was published by the government in November along with the budget, singled out Maltacom for privatisation. The White Paper said that the modality of sale for Maltacom could consist of one of many types of privatisation methods, namely, flotation through the stock market of up to 100 per cent of the share capital of the company, a strategic or trade sale through direct negotiation, a management buyout or an asset sale.

Should a management buyout of Maltacom go ahead, it would be the first time that a major government-owned company has been privatised using this method.