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Govt cannot pretend it is not borrowing heavily with £165m deal, say GSD

The GSD yesterday stated the Gibraltar Government ‘is borrowing heavily to fund capital’ through the recent £165m property deal on its share of 50/50 homes.

The Leader of the GSD, Keith Azopardi and MPs Elliott Philips, Daniel Feetham and Roy Clinton yesterday met with the Chief Minister and his advisers to be briefed on the new 50/50 borrowing scheme.

The deal involves the sale of co-ownership interests of six housing estates to Gibraltar-registered company GIC Limited.

The housing estates include Waterport Terraces, Cumberland Terraces, Bayview Terraces, Nelson’s View, Beachview Terraces, and Mons Calpe Mews.

“The meeting offered the GSD an opportunity to hear details of the scheme put together and ask questions,” said GSD Leader Keith Azopardi.

“We have reflected carefully on everything that was said. What we have heard from the Chief Minister and his legal advisers are details in respect of a very clever piece of financial engineering.”
“However the substance of the transaction as opposed to its legal form is that £164.7 million has been issued in Loan Notes in March 2019 that will indirectly be repaid over a period of 15 years at a fixed rate of 3.29%.”

Mr Azopardi added that £88.5m was used to purchase the Government’s interest in the six affordable housing schemes and £67.25 million has been earmarked for the initial development costs of Hassan Centenary Terraces.

A further balance of £9m has been earmarked for administration and transactional costs as well as the first year’s interest repayment, Mr Azopardi said in a statement.

“The repayment of capital and interest is anticipated to be funded from future sales of property of the six named housing estates as well as Hassans Centenary Terraces that has also been parked within the same ownership structure.”

“Coupled with the previous mortgage of our housing estates for £300 million, this Government cannot continue to pretend that it is not borrowing heavily to fund its capital projects.”