Liechtenstein Government Approves Refurbishment & Further Development Of Malbun Lifts

The Lichtenstein government has approved the report and application for the further development of the Malbun/Steg local recreation area and for the renovation of the Malbun mountain railways

At its meeting on Tuesday, May 3, 2022, the government passed a report and application regarding the further development of the Malbun/Steg local recreation area and the future orientation and renovation of the Malbun mountain railways. The Malbun/Steg destination is the local alpine recreation area for the Liechtenstein population and the center of alpine tourism in the country. With the Bergbahnen Malbun AG (BBM), the central service provider for the mountain area is now in financial difficulties. BBM is a private limited company in which the public sector is the main shareholder (state 48%, municipalities 25%).

In November 2020, the state parliament commissioned the government to present various variants for the further development of the Malbun/Steg local recreation area and for the renovation of the BBM, so that the BBM can be placed on a sustainable financial basis by the end of 2022.

Moderate tourist expansion of the Malbun/Steg destination

The government defines three scenarios for the further development of the Malbun/Steg destination and recommends moderate tourism expansion in order to maintain the attractiveness of the local recreation area for the Liechtenstein population and guests. In cooperation with the stakeholders of the mountain area, seven strategic directions were defined, such as the target group-specific, qualitative expansion of the winter offer, the natural expansion of the summer and year-round offer, the definition of "touristy" and "non-touristy" areas, the creation of a long-term tourism financing and the promotion of a "Green Malbun".

Refurbishment concept Bergbahnen Malbun (BBM)

For the restructuring of BBM, a capital reduction of all shareholders by 85% to 15% of the share capital is necessary. The necessary investment requirements are then to be co-financed by a capital increase of a total of CHF 5 million by the state (CHF 2.4 million), the local communities of Triesenberg and Vaduz (total CHF 1.1 million) and private individuals (CHF 1.5 million).

The structural deficit of CHF 900,000, which will remain even after the renovation of the BBM, is to be covered by annual state contributions of CHF 650,000 (multi-year financial resolutions) and contributions of around CHF 250,000 from holiday home owners (tourism financing). A new legal basis is required for the collection of holiday home taxes, which should come into force from 2025 at the latest. Until the law comes into force, the annual state contributions will increase accordingly to CHF 900,000. With these contributions, BBM will be able to finance ongoing (replacement) investments so that the company can plan for the long term.

Part of the reorganization solution is also the unbundling of the JUFA hotel, in which BBM has a substantial stake and bears a high debt burden. After intensive talks, it was possible to find a suitable buyer for the hotel. The JUFA Group is committed to the Malbun location and wants to continue its previous commitment. JUFA therefore wants to take over the property in cooperation with a group of investors and has submitted a corresponding purchase offer at a market price of CHF 8.0 million. In order to make the takeover possible and to implement the demerger, a security contribution of CHF 2.0 million from the state and waivers of claims by the banks and private investors totaling CHF 2.8 million are necessary.

The proposed refurbishment solution is to be implemented in the coming months so that the BBM will be refurbished by the end of the year. For financial bridging purposes, on the one hand the repayment of the interest-free loan from the state (CHF 700,000) paid out in 2020 is to be waived and on the other hand an additional bridging contribution of CHF 800,000 is to be paid for 2022 (à-fonds-perdu). The government is applying for a supplementary loan of CHF 5.2 million for the year 2022 to implement the restructuring solution.

The present redevelopment concept is a clear commitment by the government to the Malbun/Steg destination as an alpine recreation area and sports facility in Liechtenstein. Accordingly, the State of Liechtenstein, as the main shareholder and with annual financial contributions, should ensure the sustainable development of BBM as a central service provider. The local municipalities of Triesenberg and Vaduz also see it as their responsibility to make a significant contribution. The government recognizes the great commitment of private individuals who have been working for the Liechtenstein mountain region for decades. The government is convinced that it is only possible to successfully and sustainably develop the unique Malbun/Steg local recreation area if all forces are involved.