Amigo share price slides after boardroom spat breaks out
Shares in British subprime loan firm Amigo have tumbled 16 per cent this morning after a spat between the lender and its major shareholder, who left the firm yesterday.
Amigo’s controlling shareholder and founder James Benamor quit the company just over a month after it was put up for sale. He is looking to find a buyer for his 61 per cent stake.
Today, Amigo published a statement attacking Benamor’s account of the company’s position. It accused him of inaccurately stating that he voted against the formal sale process and mischaracterising the firm’s approach to market and stakeholder communications.
Benamor’s abrupt departure came less than three months after he returned to Amigo in a boardroom coup.
He established the company in 2005 and was appointed non-executive director in 2016, but stepped down from the role in September 2018.
The lender said it will press on with a formal sale process. Despite keeping his stake up for sale, analysts speculated that Benamor himself might launch a bid.
Shares in Amigo, which offers high-interest loans to people with bad credit ratings, stood at 34.05p this morning.
The embattled firm has attracted the attention of regulators due to concerns that some of its customers would struggle to pay back their loans.
The FCA is currently reviewing Amigo’s system of allowing people to name guarantors as it is concerned that those guarantors do not know the risks when agreeing to the repayment plan.
Amigo makes unsecured loans of up to £10,000 with annual interest rates of 49.9 per cent.
Regulatory pressure along with a slowing economy has sent Amigo’s share price down more than 80 per cent in a year.
Last month, Amigo said it had received interest about a sale from a number of parties.