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America's Cup: Malta drops out, Late Challengers put on deadline

by Richard Gladwell, Sail-World.com/nz 31 May 2019 16:31 NZST 31 May 2019
Royal Malta Yacht Club was formed in 1835 over a decade before the initial race which created the America's Cup © Sam Scicluna

One of the three late Challenges for the America's Cup has been withdrawn from the regatta by their Club.

Royal Malta YC has advised they are pulling Malta Altus Challenge from the 36th America's Cup in a letter of withdrawal sent by the Club.

The new team had attracted a bevvy of top America's Cup talent, 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. They won two races and lost another two by a margin of just 1sec, and another after their helmsman slipped overboard, while marginally ahead of Team NZ.

The financial backers of the project, led by Italian born businessman Pasquale Cataldi, apparently failed to raise the necessary finance for the project to make material steps towards building a Challenger. It is believed that none of the contracted team has been paid for up to nine months of work.

Cataldi is an Italian, based in Florence, who heads up 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 in an exclusive 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."

Pasquale Cataldi 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 YC challenge was the fourth accepted by the Defender, Royal New Zealand Yacht Squadron. However, the viability of the Challenge was 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 be accepted, as it was unconditional and under the Deed of Gift, modified by Protocol which governs the 2021 America's Cup, RNZYS and Emirates Team NZ had no choice but to accept any valid Challenge that complied with the conditions of both documents.

Established in 1835, 16 years before the advent of the America's Cup, Royal Malta Yacht Club is one of the most prestigious yacht clubs in the world, and easily satisfied the validity requirements in the entry documents.

After an Arbitration Panel hearing into the legality of the three Late Challengers accepted by RNZYS, Emirates Team NZ 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, Royal Malta Yacht Club 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 stated, using now-hollow words, when Malta Altus Challenge was announced on December 7, 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 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 their loyalty to the newer Malta Altus Challenge. Cataldi was also named in Italian media as being the board chairman of Malta-based BitBullFund which specialises in cryptocurrencies. He also shared a business interest in blockchain technology in which Malta wishes to become a world centre.

While the Maltese challenge has withdrawn, they will continue to play a small part in the 36th America's Cup with their 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.

Two Challengers put on Notice

The withdrawal of the Malta Altus Challenge has reduced the Challenger field to five - comprising three "Super Teams" who all have two boat AC75 campaigns underway, plus the remaining two late Challengers, DutchSail, and Stars & Stripes Team USA who will be building single AC75 race boats.

The Defender has asked the two late Challengers to confirm their commitment to the event by July 1, 2019

Both remaining Late Challenge teams are believed to be using a basic AC75 design from Emirates Team New Zealand, which significantly reduces the lead-time to launch an AC75 race boat.

The withdrawal of a single boat team is expected to have little effect on the construction of an America's Cup base area in Auckland.

The development project will become the basis of a major marine events venue in Auckland. Besides the America's Cup hosting Auckland, is also expected to be one of the front-runners to host a stopover in 2021/22 edition of The Ocean Race (formerly the Volvo Ocean Race) for which organisers are predicting a fleet of 12-16 boats spread across two fleets.

The first event of the 36th America's Cup is expected to be the America's Cup World Series, a first showcase regatta for the AC75 class which is now being staged in April 2020 in Cagliari, Sardinia, where Challenger of Record, Luna Rossa is based.

The first bases are due to be handed over to the Super Teams in August 2019. The Late Challengers were not expected to take up their bases until October 2020, however under a rejigged ACWS program teams are expected to spend more time in Auckland than initially planned with an ACWS regatta being under consideration for Auckland in October 2020, as well as the Christmas Cup scheduled for mid-December 2020.

The first AC75's are expected to be launched in July-August 2019 in New Zealand, USA, Italy and Great Britain.

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