Adios Amigo! Sub-prime lender to be wound down after it fails to secure emergency funds
Troubled Amigo Holdings will be liquidated after it failed to secure emergency funds.
The Bournemouth-based sub-prime lender said it will stop lending with immediate effect and instead embark on an orderly 12-month wind-down process.
The move will see shareholders wiped out, with any leftover assets transferred to those owed compensation by Amigo after it was accused of lending money to people who could not afford to repay.
Liquidation: Amigo Loans, founded by James Benamor (pictured), said it will stop lending with immediate effect and embark on an orderly 12-month wind-down process
But Amigo – which specialises in lending to borrowers who cannot access loans from mainstream banks – said they would receive a ‘lower level of cash compensation’ than they would have if emergency funding had been secured.
Shares crashed 85.6 per cent, or 1.49p, to 0.25p. That valued Amigo – which listed in 2018 with a value of £1.3billion – at less than £2million. Chief executive Danny Malone described it as ‘a very sad day’.
Amigo’s 200 employees will continue to be paid as the firm pushes ahead with the year-long wind-down, he said.
The business has been on a survival footing since it was blocked in 2020 from lending by the Financial Conduct Authority (FCA).
It had failed to conduct proper affordability checks and dished out high-interest loans to borrowers with shaky credit histories.
Amigo secured High Court approval last year for a redress scheme and was given the green light from the FCA to restart lending in October.
Under the terms of the scheme, the firm was required to raise £45million from investors to stay afloat.
But Amigo yesterday said it has not received ‘firm commitments’ from investors, who were put off by the ‘increasingly challenging economic backdrop in the UK’.
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