Amigo plots 11th hour music and film streaming move
Embattled UK subprime lender Amigo is exploring a shift into the music and film streaming market in a last ditch attempt to salvage value for shareholders.
The company revealed on Tuesday it has entered talks with a consortium to buy Norway-based music streaming service ONE Bas.com, Swedish film streaming service TV Zinos, payments provider Payzinos, and digital magazine company Magazinos using newly issued Amigo shares.
Amigo’s shares have been suspended from trading until further details are announced.
The company warned if the deals go ahead, current shareholders would be “significantly diluted” but they would still stand to gain more than if Amigo’s business fully collapsed.
Amigo’s shares have plummeted since its £1.3bn listing in 2018, with the company’s current market value now lying at £1.8bn.
The negotiations are set to continue until mid December. If they are a success, the consortium, led by merchant bank Craven House Capital, could gain access to Amigo’s London listing through a reverse takeover.
Amigo’s woes began when the UK’s financial watchdog reprimanded the company in February for its poor borrower assessments.
Following failed restructuring and fundraising efforts, Amigo decided to wind down its lending business.
The subprime lending industry has faced regulatory scrutiny over the affordability of its loans, resulting in the demise of major players in the sector, including the death of payday lender Wonga in 2018.
Amigo chief Danny Malone who resigned in May will see through the talks.