Bottom Line: Harmony's cash call creates discord (CORRECTED)
Friday 07 May 1993
SHAREHOLDERS in Harmony Leisure should turn down the chance of subscribing to the company's pounds 1.8m rights issue. In conjunction with the cash call, new management is proposing to purchase, on behalf of Harmony, their own private property assets.
Harmony owns 18 public houses and has lost steadily increasing sums over the past three years. New management - John Main, chairman, and Lewis Davis, director - want to turn Harmony into a property investment and development company. As a first step Mr Main wants Harmony to buy Kewbrook Investments, of which Mr Main owns 50 per cent, and Hoe Properties, which is wholly owned by Mr Davis. Both have been valued by outside firms.
Both men are taking Harmony shares in payment, which gives some reassurance about their commitment. The response of other shareholders to the cash call is not so comforting. Southend Properties, a quoted company of which Mr Main was chairman until recently, is only taking up rights on one-fifth of its 18 per cent stake. Stanley Lever - former Harmony chairman and 23 per cent stakeholder - is getting out altogether.
Mr Main points to his stewardship of Southend as evidence of his abilities to manage Harmony successfully. But neither he nor his close colleagues have experience in pub management.
Harmony, with pounds 3m of debt, has bank support so all the pounds 1.8m rights cash - underwritten by Guinness Mahon - is available for expansion. Doubtless there are many opportunities at bargain prices, but there is still some way to go before the commercial property market recovers.
The rights shares are being offered at 5p, compared with the market price yesterday of 7.5p, down from 8p. In early 1989 they were trading at 70p. Messrs Main and Davis have 3.5 million share options each, exercisable at 6p some time between 1995 and 2000, which gives obvious motivation. Other investors should treat Harmony with caution.
John Main, the chairman of Harmony Leisure, is also a director of Southend but has never been the property company's chairman, contrary to a report in yesterday's edition.
Threat of 'catastrophic cascade of collisions' involving 300,000 pieces of rubbish must be averted, warn scientists
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Poor 'live like animals' says Boris's privately educated sister after going on 'poverty safari'
Exclusive: Impact of immigrants on British workers ‘negligible’
Vince Cable: Teachers 'know absolutely nothing' about the world of work
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
The quiet diplomat: Catherine Ashton - recognised and admired in all the world’s troubled countries, yet ridiculed at home
- 1 Oxford is the least affordable city in the UK, where houses cost 11 times local salaries
- 2 Australian man Rod Sommerville reacts to bite from deadly snake by reaching for cold beer
- 3 North Korea elections: Kim Jong-un wins 100% of the vote
- 4 David Cameron resorts to paying for Facebook fans because not enough people like him
- 5 Steve Irwin’s final words: Cameraman present at death opens up about deadly stingray attack for the first time
iJobs Money & Business
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£55000 - £70000 per annum + benefits: Pro-Recruitment Group: In-House Corporat...
£80000 - £100000 per annum + benefits: Pro-Recruitment Group: In-House Opportu...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...