Adios Amigo? Lender set to wind down after failing to raise £15m survival cash
Controversial lender Amigo loans looks set to be wound down after halting new business today and announcing its efforts to raise £15m emergency cash had failed.
Shares in the firm cratered more than 80 per cent in early trading after bosses said they had resorted to a “fallback solution” of winding down the firm and there was no other “viable route forward.”
The announcement looks set to end the survival struggles of the subprime lender, which have been ongoing since it was suspended from lending by the Financial Conduct Authority in 2020 for dishing out unaffordable loans to borrowers with shaky credit histories.
The wind down will now see £97m offered to the firm’s creditors with a mechanism put in place to return excess cash to creditors of the scheme.
Boss Danny Malone Danny said in a statement it was a “very sad day for all our employees” and the firm’s creditors due redress who “will now receive a lower level of cash compensation than they would had the new business conditions been satisfied.”
“We have fought hard to deliver the best outcome for creditors, colleagues and shareholders and have left no stone unturned,” he said.
“From the beginning, we have faced significant challenges in seeking a solution in the best interests of all our stakeholders and have had to make a series of difficult decisions.”
Malone added that after “full and careful consideration of all further options available to us, we do not believe there is another viable route forward.”
“Our priority is to now undertake an orderly wind-down of both the Amigo Loans Ltd business and the wider group over the next 12 months or so in which we maximise returns for Scheme creditors and look after our people as we move through the process,” he said.
The FCA publicly censured Amigo earlier this year but spared the firm a £72.9m fine on the grounds it would prevent the firm from paying out compensation to customers.