Joseph Portelli doesn’t want to buy an island

The story about Joseph Portelli’s alleged purchase of the island in Montenegro doesn’t really add up. Behind this alleged and/or intended deal, there is a lot that we are not yet seeing which can probably explain the extensive corruption behind Joseph Muscat’s deals in Montenegro, made when he was Prime Minister. This story may also explain the relationship between Yorgen Fenech and Joseph Portelli: Portelli owes money to Fenech.

Let’s make this very clear first. Joseph Portelli doesn’t have €90 million in cash to buy an island. He probably does not have any cash at all to make any significant purchases.

Various company reports of which he is the owner give a very different picture of Portelli’s wealth than what has been projected so far in the press. Portelli’s companies seem to be highly leveraged with potentially unsustainable debts. For example, one company whose own auditors are telling him is in a very risky situation is called MENFI Limited which has up to €2.8 million in debt. Interestingly, previous Labour MP and Minister Franco Mercieca is also a shareholder of this company.

However, Joseph Portelli’s biggest debts seem to be coming from the Mercury Tower in Paceville which he recently offered to sell to a foreign resident in Malta. Mercury Tower is built on debt, mainly €22.5 million in debt from the public, of which €5.65 million of it was used to pay a loan from Lombard Bank for the purchase of the site. In March this year, Mercury Projects Finance Ltd issued another €50 million in bonds which were all sold. Mercury Towers claims that the project has been funded by the sale of the apartments and most of them have been sold but Portelli needed another €50 million for the construction of the hotel. Outstanding, Joseph Portelli has at least €70 million in debt to pay back to bondholders + interest. In 2020 Mercury Towers claimed to have €26 million in equity and that it had received up to €30 million already in promises of sale. The project is set to be completed by the end of 2022.

Then there is the island in question which is owned by Russian oligarch Mikhail Viktorovich Slipenchuk and allegedly is being sold for €90 million. The island surely does not cost anywhere near that price. The island is 1.5km long and 432 meters wide. The Russian oligarch who owned it (or stills owns it) hasn’t built anything on the island which would justify that kind of price tag either. Here’s a list of other islands in the Adriatic with very different price tags.

It would be interesting to further research the Montenegro story and Joseph Portelli’s finances to see whether what is he saying adds up.