Harlequin Property, the Essex, UK-based resort developer that’s been in the news recently, after its management unveiled a draft rescue proposal it says could avoid the need to put its troubled Buccament Bay Resort project into liquidation, says a survey of investors in that project has revealed that 95% “want to avoid” such a sell-off.
Other findings of the survey, which Harlequin said was carried out within the last few days, included 90% of investors saying they found “the key features of Harlequin’s proposal ‘appealing'”, and 88% saying they “support the idea of Harlequin Property (SVG) Ltd investors owning all HP SVG assets, including Buccament Bay Resort”. (The HP SVG business also includes an undeveloped beachfront site in Barbados known as Merricks.)
Based on the results of its survey, Harlequin said there seemed to be widespread support for going ahead with its rescue scheme, rather than seeing the business liquidated and the assets – such as would be left after trade and other creditors were paid – distributed to them.
According to Harlequin, it received 700 responses to its survey, which it noted represented approximately 23% of the 3,000 HP SVG investors.
How the survey was carried out
The Harlequin survey consisted of six questions, after each of which the respondents were asked to rate how important they regarded the issue being asked about.
Harlequin said it wanted to “ascertain investors’ thoughts on a range of matters relating to the proposal process currently being played out in the St Vincent courts”.
It added that the responses would be used by Harlequin’s management team to help it put together its final draft of its proposal, which is due to be finalised and put to HP SVG investors “within weeks”.
‘Months in development’
As reported, Harlequin founder and chairman David Ames last month revealed a plan he said had been “months” in development, which looks to take advantage of a new Saint Vincent and the Grenadines regime designed to give companies facing bankruptcy an alternative to liquidation. As currently envisioned, the scheme would involve one of four as-yet-unnamed hotel management companies signing up to run the Buccament Bay development on behalf of the investors, who would be handed ownership of the business.
Ames, pictured, unveiled his plan – still in draft form, as it is remains, for now – on 25 January, a day after the UK’s Court of Appeal turned down a request by the UK accountancy firm, Wilkins Kennedy, to appeal a High Court judgment last December, which ordered it to pay US$11.5m (£9.14m) to Harlequin, in connection with an over-payment to a construction company known as ICE Group.
Ames’s plan is to put the US$11.5m – minus legal fees and other costs incurred in bringing the legal case against Wilkins Kennedy – towards restoring the Buccament Bay resort in Saint Vincent to “full use for the benefit of Harlequin Property (SVG) investors”, who, he explained, would be handed ownership of the resort.
One of the hotel management companies that have expressed an interest in running Buccament Bay is located in the Caribbean and the other three come from elsewhere, Ames said.
If the SVG court rejects the proposal, HP SVG and its assets will enter a liquidation process. A vote on the proposal would be held within 21 days of its being officially published.
‘Investors want to avoid liquidation’
In a statement, Ames said the survey highlighted two “crucial” points: That more than nine out of 10 HP SVG investors “like the main features of the proposal package”, and that “virtually all [of the] investors want to avoid liquidation if possible”.
“The most important thing for me is ensuring our investors can make the best of this situation, and it’s clear that HP SVG investors want the chance to make the most of their investment monies, if it’s viable to do so,” Ames added.
“This is why I’m prepared to hand them control of HP SVG’s assets, including what was, until very recently a successful, multi-award-winning resort.
“Creating a viable and attractive proposal is a massive undertaking on limited resources, but we’ve made a lot of progress in a short space of time. The viability aspect requires some cooperation from external parties, which can take time to arrange, but the fantastic level of engagement from investors via meetings, telephone calls, correspondence and survey responses has made the fine tuning of the Proposal’s main features much easier.
“There are one or two third parties pushing for a liquidation scenario, but I firmly believe HP SVG investors deserve and must have a meaningful vote on the finished product, free of outside interference.
“Within a matter of weeks, the proposal will be completed and investors will receive a robust document that allows them to make a fully informed decision. This process isn’t about someone’s feelings towards me or professionals gaining fees; this is about the financial futures of regular people from all walks of life.”
In a separate but related development, a new airport is due to open next week on Saint Vincent, the island Buccament Bay is located on. Ames says the new airport “will allow direct international flights to the country for the first time”, thus significantly increasing the resort’s potential accessibility to international markets, including North America, a key market for Caribbean resorts.