This week Kevan Halliwell was up to his usual Ourspace trickery. Yet another dishonest offer to investors designed to enrich himself.
First of all he tells investors that if they send him more money they will be buying an asset that is at a massive discount to the book value. He fails to inform investors that the true value of the asset is actually close to the valuation he has put on the newly restructured company and that there is no genuine massive discount. Even at the low price nobody is stepping forward to buy these assets.
We describe the new organisation as being “his” because Halliwell is offering investors an initial 49.9% and is keeping 50.1% for himself. The reason is so that he retains control of the money and investors do not have a say. He has a history of losing investors’ money and it would be unwise to think that he actually has any business acumen. He likes 5-star hotels and fine dining using other people’s money.
Is it fair that Halliwell has more than 50% of the new company ? NO – IT ISN’T.
The administrator’s report provides interesting reading. It shows the list of creditors of OurSpace Investments Ltd (“OIL”). Remember that Halliwell is claiming that OIL owns the only assets of the entire group. Halliwell is shown as a creditor of the company. In the event of any payout from the sale of the assets Kevan Halliwell is entitled to 2% of the money paid to creditors. Yes, that is correct. His investment level, compared to that of everyone else, only entitles him to 2% of the money from the administration. Yet here he is proposing a restructuring where he would be entitled to the bulk of the money raised by the company if the company were to be liquidated at any point. Halliwell would be entitled to 80% of the money. In our opinion it is certainly possible that this restructured company could suddenly liquidate very quickly if this mysterious partner will not negotiate with Halliwell. Even if the mystery partner did co-operate, these two workspace sites could easily cease trading because they are in a precarious position. Then Halliwell would get 80% of the money.
If you check the latest proposal on page 8 where he gives the two scenarios – Example A and Example B – you will see that in both cases Kevan Halliwell would get 80% of the value in liquidation and OVL would get 20%. The investors who he is expecting to pay a minimum of $2.5m actually receive ZERO from a liquidation.
There is such a thing as a high risk investment. On the basis of what is being proposed by Halliwell and his history of failure we would put the level of risk on this investment as being way beyond the top end of the scale.
The important difference between the existing structure and this new one is that in this restructuring investors would no longer be owed a debt by the company. They would be shareholders. This means that all investors added together in the new structure would be entitled to nothing if the new structure resulted in a liquidation whilst Halliwell would be entitled to 80%. It’s another one of Halliwell’s neat little restructuring tricks designed to benefit himself.
Is what Halliwell saying actually true ? Is there a party who can take the assets of Ourspace Investments Ltd ? On page 6 of the administrator’s report we find this statement below.
Secured creditors: There are no creditors with security over the company’s assets.
So, it appears that the administrator disagrees with Halliwell’s assessment. I think what all investors would like to know is what is the name of this mysterious party which supposedly threatens the assets ? Halliwell describes it as OVL i.e Ourspace Ventures Ltd incorporated in the Cayman Islands, but WHO actually controls that company ? Halliwell knows because he has been dealing with them. He invited them in and it would have been him who gave them security. Why won’t he tell investors ?
Who are these bondholders who are interested in underwriting the $2.5m ? Investors need to be very careful and should take legal advice before they change their circumstances. Exchanging a debt position for an equity position is generally a bad step for any creditor unless they have absolute trust in the management.
Now here’s another interesting outcome that investors should be aware of. This mysterious partner who allegedly threatens the assets is owed, according to Halliwell, $2.75m. All the other investors are owed around $27.5m. This is quite tidy because it shows that OVL’s investment is 10% of the total of $30m. So, what would be the position AFTER the restructuring if Halliwell’s proposal goes ahead. Unbelievably this greedy CEO proposes to cut the investors’ shares by half and give half of their shares to OVL. What happens to Halliwell’s 50.1% – NOTHING. He keeps all of his shares. Investors receive 49.9% at the start but end up with a lot lower percentage at the end with OVL being given a large chunk of their share. Kevan Halliwell is a master of manipulation.
The reality is that Halliwell transferred investors out of workspace leases and into debentures with Malta companies so that he could remove investors’ security over the leases in Marbella and Dubai. He then gave that security to the mysterious partner. He tricked investors into accepting a weaker position by lying to them that they would be better off. We do not trust this man.
Due to the dishonesty of this latest proposal Safe Or Scam and our existing Ourspace investor group will be making an alternative offer to the administrator. It will be far more generous to investors and will involve the total removal of Kevan Halliwell from any position of influence and control over the assets. It will also mean that investors will not have to give up their rights to prosecute Kevan Halliwell and his accomplices to recover their losses. We are still pursuing those people. Anyone who accepts Halliwell’s latest offer is signing away their right to compensation.
If you are concerned that you may not receive details of our counter-proposal please drop us a line and we will ensure that you are included in the mailing.