Bank of Valletta plc - Update on Deiulemar Case

On 7 August 2020, Bank of Valletta plc issued an announcement in relation to recent articles in the press in which it was reported that the bank made an out-of-court settlement offer of €50 million to the Deiulemar bondholders in Italy. In this respect, BOV explained that a previous company announcement about the offer was not made because, as is customary and proper in settlement negotiations, the offer was made on a confidential basis. Furthermore, as the offer was subsequently rejected, there was no scope for an announcement to be made.

Regardless of the offer and its outcome, BOV noted that it has consistently been advised by its lawyers that the Deiulemar case is completely without merit. Moreover, the advice of the bank’s lawyers has recently been independently confirmed by Italy’s leading legal authority in this area, and that advice has been brought to the attention of the court. This notwithstanding, BOV faces a most unusual fair hearing risk in this litigation and thus is seeking to eliminate that risk through proceedings filed before the European Court of Human Rights and other measures.

In this context, however, BOV explained that there is still the risk at first instance against it. In view of this, and because of the consequential costs the bank may have to incur, it made commercial sense for BOV to offer a settlement to the curators in order to close the matter. In other words, the offer was not a result of any change in the bank’s conviction that the claim is entirely unmeritorious, but rather an attempt at finding a pragmatic, commercial solution.

BOV concluded by stating that it will continue updating the market with any relevant developments on this case.