One of the region’s most prominent developers has called a crunch meeting with investors as it seeks to battle back from a series of major difficulties.
The High Street Group is best known for developing Hadrian’s Tower, Newcastle’s tallest building, and is also working on major schemes close to St James’ Park and on the former Brett Oils site on the banks of the Tyne.
But the company has faced a turbulent year which has included one of its companies being wound up, a number of accounts being filed late and its auditors resigning over claims they could not get proper access to company information.
Now the Newcastle-based group, which is also leading major developments in Birmingham and Greater Manchester, has called a meeting of investors where it is asking them to waive the right for early redemptions on investments.
High Street Group has previously said that it has been put in difficulties after a number of big institutional investors withdrew funding for major projects during the coronavirus pandemic.
It is asking investors to scrap a condition that allows them to redeem investment before the end of a seven-year bond, and warns that if it fails to get approval, it could have to review the company’s ability to continue as a ‘going concern’.
But High Street Group says the plan put to shareholders offers the company a chance to re-set after the pandemic.
It has also revealed that its financial position has been boosted by the agreement of a £172m deal with a major real estate group. The investment from Edmond de Rothschild Real Estate Investment Management is across a number of developments.
Most Read
A statement from High Street Group said: “Our investor proposal is a pragmatic, viable and responsible course of action to support the company’s successful corralling of resources to continue its investment programme.
“Investors will receive 100% of their investment plus the agreed interest, but without the ability for early redemption. This measure is not unusual, in fact during the pandemic the FCA gave permission for investment firms to pause redemptions in order to maintain the viability of the sector.
“Our proposal has met with strong levels of support with 50% of investors having already agreed to the new terms. New funding has been agreed for all our projects, which are now remobilising. The investor proposal is the final element of our fight back from the pandemic to take advantage of a newly emerging buoyant market.”
High Street Group, which is led by Gary Forrest, is behind a number of high profile development schemes around the country, and also has a leisure division that runs a number of bars, restaurants and hotels in the North East.
The company said in February that it had suffered difficulties after the Financial Conduct Authority (FCA) allowed investment groups to suspend lending during the coronavirus pandemic.
That followed a court decision in September 2020 where a subsidiary that aimed to create new homes on rooftops, particularly in London, was put into administration after it was unable to re-pay multimillion-pound sums to Korean financiers.
The company’s 2018 accounts were published more than a year late and included an adverse opinion from its new auditors, Haines Watts. Previous auditors PwC resigned, saying that it had not been able to obtain the information needed to complete a reliable audit on the company.
High Street Group’s 2019 accounts are five months overdue but it is believed publication is due soon.