Harlequin, the beleaguered property investment group, has parted company with the firm charged with finding suitable finance to back the restructure of the group.
Eleven Capital was instructed in April to research the finance options available to Harlequin as part of a wider restructure. During this process, James Cannon of Eleven Capital, met with investors at Harlequin’s Open Days, again in April to outline some of the options.
According to a letter from Mr Cannon sent to investors on 31st May 2013 and seen by Investment Sense, Eleven Capital “made initial enquiries of a number of lenders worldwide and there are over 10 interested in taking matters further.”
The letter went on to warn: “The current view is that if the overseas companies are placed in any form of insolvency procedure, the investors may receive as little as 10p in the pound.”
However, it now seems that the agreement between Harlequin and Eleven Capital has come to an end.
A spokesperson for Harlequin told Investment Sense: “Whilst Harlequin was keen to work with Eleven Capital for fundraising purposes and a mandate was signed to that effect, we can confirm that the arrangement with Eleven has been terminated. Harlequin was unable to continue working with Eleven for standard commercial reasons, including the fact that Harlequin was unwilling to agree the level of upfront fees requested and wanted the freedom to explore other options to the proposal made by Eleven.”
The statement continues: “Harlequin also felt that Eleven’s experience was more geared towards raising finance than undertaking a complex restructure. Harlequin is grateful for the public support offered by Eleven in the time they worked together. Harlequin is now in discussions with a firm of solicitors, which has also put forward a proposal for consideration with a view to establishing the means of continuing to develop the resorts in the Caribbean, as well as giving the Investors greater comfort and transparency.”
Eleven Capital confirmed their relationship with Harlequin had come to an end but were unable to give more details.
The “firm of solicitors” referred to in the Harlequin statement are believed to be Regulatory Legal.
A statement from David Ames dated 11th July 2013 said: “As we have previously informed you, Harlequin has been working with a number of parties to explore restructuring options for both investors and Harlequin’s overseas companies to ensure effective delivery of investments. Harlequin is now in advanced discussions with Regulatory Legal Solicitors (R Legal) which represents both the Harlequin Investor Group (HIG) and individual investors to work towards securing a plan to protect the future of Harlequin and its investors.”
The statement continues: “Whilst it is fair to say that the two parties have not always seen eye to eye in recent months, it is clear that the parties acknowledge that conflict is counterproductive and seek to avoid such conflict. The intention to achieve the best outcome for investors has to be the priority. Therefore, all investors need to be focused on a sensible solution which deals with all types of investors.”
“The final plan will give investors transparency and a greater say on how funds are raised and spend on construction. Once the plan is agreed and implemented, it is envisaged that the main source of funds for the construction will be monies from completions and external finance. In order for this to happen, investors and financiers need to feel confident in the future of Harlequin.
The statement concludes: “Harlequin is confident that the final plan will satisfy investor requirements and provide investors with long term security moving forwards. Once all of the details have been agreed, the plan will be presented jointly at investor meetings. By the end of July, we aim to publish the dates of these meetings.”
“Harlequin and R Legal will keep investors regularly updated throughout the process.”
Some four months on from the round of investor meetings, only time will tell if Harlequin meet their end of July deadline or whether the apparent ‘truce’ between Regulatory Legal and Harlequin, following a recent war of words, will result in some long awaited respite for investors.
Are you a Harlequin Property investor?
If you are a Harlequin Property investor you will naturally be concerned about the recent developments. The investors we have spoken to have had mixed emotions, however all have wanted to take some form of action.
We would recommend that Harlequin investors continue to monitor the situation whilst completing the Harlequin Property Serious Fraud Office questionnaire, which can be found by clicking here and also visit the website set up by Regulatory Legal: www.harlequininvestorgroup.co.uk for more news.