• The Claims Bureau

The Resort Group calls in restructure specialists amid troubles at the firm.

The troubled overseas property investment firm The Resort Group have hired the investment bank Lazard to "review all options available" after running into difficulties during the construction of one of their projects.

Investments in the Cape Verde-based luxury property group are held by some UK investors SIPP's (self-invested personal pensions). These investors previously stated that they were facing difficulty as their returns had fallen short of their expectations, regularly not covering the annual cost of the running of their SIPP's.

The Resort Group own four luxury resorts in Cape Verde, one of these being White Sands, which remains under construction. Investors received a letter last week from The Resort Group stating that the resort now required significant capital increase for the construction to be completed.

The letter, written by The Resort Group's Chief Operating Officer, Charlie King also mentioned that the company's "situation has deteriorated significantly" since their previous update to investors. He explained that The Resort Group has suspended all pre-construction interest payments to investors until there is a secured funding solution.

Mr King said there was "several initiatives in progress to make this happen", including discussions with the Cape Verde government about a possible bond issue and negotiations with commercial banks.

A spokesperson from The Resort Group said "The decision to appoint Lazard was taken so as to introduce new capital into the group, whilst also strengthening our operations moving forward.

"Regrettably our investors have experienced a delay in receiving their rental payments, with one quarterly payment outstanding.

"However, we have and will continue to pay all investors their rental returns due and outstanding, whilst remaining ever committed to ensuring the long-term success of our resorts."

SIPP investors were sold bricks-and-mortar as well as share-based investments in The Resort Group by advisers and introducers in the UK, in return for rental and interest payments. Some of the investments are held in SIPP's administered by Rowanmoor.

Investors were previously thrown a curveball in August when rental payments stalled.

The Resort Group told investors at the time the payments were delayed due to "certain loan commitments" it has to honour, as well as lower revenues during the summer months. It said payments would be made imminently.

However, it is understood that many investors have still not been paid their rental returns for the past quarter.

The FCA (Financial Conduct Authority) became interested in the investment scheme in 2017 when it wrote to The Resort Group investors to ask for information. It is believed this is still ongoing.

If you have been affected by the activities or involvement with The Resort Group, please get in touch with us.

The information in this article has been sourced from: https://www.ftadviser.com/pensions/2019/11/19/troubled-overseas-property-firm-calls-in-restructure-specialists/?utm_campaign=FTAdviser+news&utm_source=emailCampaign&utm_medium=email&utm_content=

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