The court-ordered auction of Indian Empress concluded successfully today in Malta. More than a dozen creditors should receive payments as a result.
According to a source that contacted us today, the winning bid was €43.5 million (about $50.4 million at press time). Ann Fenech, managing partner of Fenech & Fenech, which represents one of the creditors, confirmed the figure upon our inquiry. She identified the bidder as a Malta-registered company called Crediyacht. On a related note, her firm further represented a few of the bidders, but not Crediyacht.
The judicial auction resulted from 13 creditors petitioning a civil court last month. Collectively, they had unpaid bills totaling a few million euros. Their troubles dated back quite some time, too. In February, for example, the 312-foot (95-meter) Indian Empress was arrested in Malta over unpaid crew wages. The global trade union Nautilus International secured the maritime lien on behalf of the 40-person crew. The union argued that Vijay Mallya, the Indian entrepreneur who owned Indian Empress, abandoned her in Malta in September 2017 and hadn’t paid about $1 million in wages. While the union got a portion of their wages paid, nearly $100,000 still remains unpaid.
Then, in April, a civil court in Malta upheld claims by Melita Power Diesel, a marine-diesel repair company. It arrested her, too, over an unpaid bill exceeding $758,000. Further in April, a Maltese civil court ruled Mallya owed about $83,300 to two yacht agents. The agents are Agence Maritime Tropezienne and Luise Associates Riviera & Co. An additional nine creditors came forward with claims by mid-May.
After at least one creditor requested a judicial auction in May, a justice set the sale of Indian Empress for May 21. However, the judge suspended that auction date a few days in advance, in favor of a different approach. Fenech told us at the time that the judge requested all parties appear before him on May 28. This included representatives for Mallya. The goal was to set a new timetable, to give interested buyers more time to learn of the opportunity. Ultimately, the judge set June 28 as the new judicial auction date.
Now that the court has awarded a bid, a few steps should follow. According to Fenech, Crediyacht has seven days to transfer funds in full to the court-appointed receiver. If that occurs, the buyer officially receives title to Indian Empress. The new ownership comes clear of liens as well. Due to the €43.5 million bid exceeding creditors’ claims, she adds, she expects them all to receive full claim payments. Creditors get ranked in priority what under Maltese law terms a competition of creditors.
There is one caveat, however. Fenech says that Crediyacht entered into a memorandum of understanding to purchase Indian Empress prior to this auction, but “never was in a position to pay.” Therefore, over the next several days, “We’ll be watching the space,” Fenech concludes.
Mallya owned Indian Empress for 12 years. He used her himself as well as offered her for charter.