It was to be Malta’s first bid for the yachting’s world’s most prestigious prize, the America’s Cup, but Malta’s hopes of glory have been scuttled after the bid was withdrawn on Friday.

The Royal Malta Yacht Club has advised that it is pulling the Malta Altus Challenge from the 36th America's Cup, being held in 2021, in a letter of withdrawal sent by the Club.

The financial backers of the project, led by Italian businessman Pasquale Cataldi, have apparently failed to raise the necessary financing for the project to make material steps towards building a challenging yacht.

It is understood that that none of the contracted team – who had been drawn mostly from the ranks of Artemis Racing who pushed Emirates Team NZ hard in the Challenger Final for the 2017 America's Cup in Bermuda - has been paid for up to nine months of work.

“This is a disappointing outcome,” said Team New Zealand boss Grant Dalton, “The Malta Altus Challenge had a strong foundation with some highly experienced and reputable America’s Cup personnel linked to the team.

“So, for them to pull out is not just a shame for the event but also for those people that have worked so hard trying to get this challenge to the start line. We hope they will continue to build on their foundation over the next 18 months with a view to the future and challenging for the 37th America’s Cup.”

The Florence-based Cataldi heads Altus S.r.il. a multinational real estate and development company with a reported $3.5billion in assets. He was working in conjunction with his business partner in Altus, Mexico based Massimo Covarrubias.

"The America's Cup is a global event, and it is one of the most important sports events in the world. It is a good fit with my business, Altus," Cataldi told Sail-world recently in an interview. "A lot of what we do at Altus is centred around lifestyle, sport and hospitality which we have and will be expanding further under the Altus brand around the world."

Cataldi also owned a Formula E racing team for two years. "It was a great experience. Like the America's Cup, Formula E is a global event and requires great teamwork to achieve success," he said in the same interview.

The Royal Malta Yacht Club challenge had been the fourth accepted by the Defender, Royal New Zealand Yacht Squadron. However, the viability of the Challenge had also been questioned by Emirates Team New Zealand in a media release two and a half months ago.

Eight Late Challenges were made on the final day of the closing date for late entries in the 36th America's Cup.

The Malta Altus Challenge was the first of the three late Challenges to have been accepted, and under America’s Cup rules the RNZYS and Emirates Team NZ had no choice but to accept any valid Challenge that complied with the conditions of both documents.

After an Arbitration Panel hearing into the legality of the three Late Challengers accepted by RNZYS, Emirates Team NZ had remarked in a media statement that, "As a result of the delay [caused by the uncertainty over the validity of the three Challenges] there are now concerns as to the likelihood of the Malta Altus Challenge being able to continue".

After raising concerns over the reluctance of the financiers of the Challenge to commit their funds to the project, the Royal Malta Yacht Club reportedly took the initiative in the past week and exercised termination clauses in their contracts with Cataldi and his business associates.

"Our goal is to do three editions of the America's Cup. If you want to build a strong team, then you need to commit to three America's Cup cycles. I think everyone in this edition is in it for the long-term. We have a new class, so the game is level for everybody, and the differences are not so much," Cataldi had stated when the Malta Altus Challenge was announced in December 2018.

It is understood there was an arrangement in place for financial support from the Maltese government, with the Prime Minister of Malta an enthusiastic supporter of the Challenge. He had tweeted the news of the Challenge just seconds after the conclusion of a meeting cementing government support, but evidently, the team was unable to meet the financial conditions to enable the drawdown of funds.

The Challenge formed a New Zealand registered company listing Cataldi and Covarrubias as shareholders. The company was registered just over a week after the Challenge was formally announced.

A second company presumably to run the Maltese end of the Challenge was registered in Malta listing Cataldi, Covarrubias and other Maltese as shareholders.

Altus and Cataldi were initially linked with Adelasia di Torres, an early potential Italian Challenger from Sardinia. But in a few weeks, Altus switched its loyalty to the newer Malta Altus Challenge. Cataldi was also named in the Italian media as being the board chairman of Malta-based BitBull Fund which specialises in cryptocurrencies and he also shared a business interest in blockchain technology.

While the Maltese challenge has been withdrawn, Malta will continue to play a small part in the 36th America's Cup with its application to the Arbitration Panel to have the meaning of sailing "nationality" confirmed in the context of this America' Cup. That ruling opened the way to anyone holding a passport of the country of the club they represented being a legal national of the team in respect of the America's Cup Protocol which had a ‘100% nationality’ rule for all sailing crew.