The Cabinet of Ministers yesterday morning gave its blessing to the sale of 73.72 per cent shareholding in Tug Malta for EUR24.7 million, 3.4 times their net asset value.

As a result, the share sale agreement with the Rimonchiatori Riuniti Spa, the Italian company chosen as the preferred bidder, will be signed tomorrow.

Investment and Information Technology Minister Austin Gatt explained that the government’s shares of the Maltese company, which was set up in 1980 and was struggling in view of tough competition, will be sold at EUR24.7 million. The net asset value of the 1,080,000 shares stood at EUR7.22 million.

The process to sell the government’s shares in this company began in September 2006 when the government issued a public expression of interest.

Following this, 12 companies expressed their interest but the Rimonchiatori Riuniti Spa was chosen as the preferred bidder.

Tug Malta was set up in 1980 and has six vessels, two of which have been purchased in the last two years. The Rimonchiatori Riuniti Spa was established in 1922 and operated from the Genoa Harbour. Between 2002 and 2006, the company registered a profit of around EUR18 million every year. It has 22 tugs.

Dr Gatt expressed his satisfaction that the government managed to strike a “very good deal” for its shareholding in Tug Malta. He added that the government is also proud that it managed to negotiate a number of conditions including that none of the company’s 90 workers will be made redundant for the next five years. Moreover, the company has agreed to invest at least EUR22 million over the next five years. It also agreed not to transfer the shares it will be taking over on Wednesday for a period of five years.

On the issue of redundancies as a result of privatisation, Dr Gatt said the government yesterday signed a new collective agreement for Tug Malta employees covering 2007, 2008 and 2009.

Dr Gatt said the Italian company also agreed to give the necessary support to the local maritime institutions for the training of sea cadets and will also employ locally-trained cadets.