Amigo shares rise as founder pushes for takeover
Shares in subprime loan business Amigo Holdings rose 14 per cent this morning after founder James Benamor last night called for investors to back his return to the company.
Benamor said he had made an irrevocable bid for 29 per cent of the company at 20 pence per share, to be executed if he is appointed as chief executive.
Benamor, who stepped away from the company after it listed in 2018, has been publicly arguing with the company’s management over strategy since late last year.
The lender, which provides loans to borrowers who struggle to obtain credit from mainstream lenders if a friend or family member can act as a guarantor for them, today reported a more than 80 per cent drop in profit in the first quarter.
Amigo is being investigated by the Financial Conduct Authority (FCA) over how it assesses the creditworthiness of customers, and has stopped almost all lending amid the coronavirus pandemic and the probe.
Benamor called for a shareholder vote to oust finance director Nayan Kisnadwala and board member Roger Lovering, as well as to reinstate himself as chief executive.
The firm said it could not provide guidance on its expected performance this year, and reiterated that the impact of the pandemic and the FCA investigation meant there is uncertainty over its ability to continue as a going concern.
Analysts said Benamor’s commitment to buy at 20 pence per share was behind the rise in the embattled lender’s stock, which rose to near 16p from its 12p close yesterday. It was at 13.5p at the time of writing.