28th Apr 2020 16:11
(Alliance News) - Amigo Holdings PLC on Tuesday said its majority owner has called for a shareholder meeting to remove the subprime lender's entire board.
Richmond Group Ltd, which has called for an extraordinary general meeting, will propose a replacement chair and a replacement chief executive officer, Amigo said. Richmond's chief executive officer is James Benamor, Amigo's founder, and up until March, he sat on the company's board as a non-executive director.
"Amigo has offered and continues to seek to work with Richmond Group to ensure that the board changes are conducted in an orderly manner and in accordance with applicable regulatory requirements," Amigo said on Tuesday.
"The company is consulting with its regulators and its advisors about the implications of this notification and the appropriate next steps."
Benamor, who owns about 60% of Amigo, hit out at the firm on social media in March, saying the company is "committing slow motion suicide". His recently-ended stint on Amigo's board began last December, after he first left Amigo's board in September 2018.
Benamor said he rejoined the Amigo board as he could not understand how Amigo seemed to have such high redress rates, but was still paying out on target.
The sub-prime lender was forced by UK regulators to change its stance on irresponsible lending.
In March 2019, the UK Financial Conduct Authority sent a letter to subprime lenders, saying these firms should consider the degree to which they present risk and how they can mitigate that.
Amigo launched a strategic review and put itself up for sale back in January. A sale could include the whole company, parts of it, the UK business, or a de-listing.
"Richmond Group Ltd has also notified the company today that it wishes for the formal sales process to continue," Amigo added on Tuesday.
Amigo floated in June 2018 at a price of 275 pence, giving a market capitalisation of GBP1.31 billion, making founder Benamor among the wealthiest businessmen in the UK at that time.
Since then the stock has plummeted, reducing the company's value to around GBP90.9 million as of Tuesday afternoon.
The stock was up 6.2% at 17.95p each in London on Tuesday afternoon.
By Eric Cunha; [email protected]
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