Talks between Malta Enterprise and Gama Textile Group, which was interested in setting up shop in Malta, are likely to collapse.
Negotiations with Gama Textile Group were declared after Denim Services Ltd said it would dismiss 800 workers and close down by the end of January.
Gama was to employ 400 workers in a project for which the government was expected to grant ?.5 million in soft loans, with most of the employees coming from Denim Services.
A spokesman for the Investments Ministry said the process was broken down after a meeting between the company, Malta Enterprise and officials of Bank of Valletta.
The government was providing all the help needed for company through Malta Enterprise, the ministry spokesman said.
Ministry kept mum over why the textile company is expected to pull out of the deal.
However, sources close to the finance sector said that the disagreement was over the funding of the project.
Dieter Krestel, in charge of Gama's corporate communications, had informed that the workforce and machinery found in Malta would fit best with the company's present and future activities.
