27th Jan 2023 11:30
(Alliance News) - Amigo Holdings PLC on Friday said it remains below the targeted capital raise of GBP45 million in equity financing, as sanctioned by the High Court.
The mid-cost credit provider said while it has received expressions of interest to support the capital raise since its market update on January 16, this remains below the above targeted figure and so discussions are ongoing.
In May 2022, the High Court sanctioned Amigo's scheme of arrangement, which contained a preferred solution which is conditional on the completion of a 19:1 capital raise by May 26, followed by the contribution of a minimum GBP15 million payment to the scheme for creditor redress.
If the capital raise is not completed or the board determines it cannot be by May 26, then the scheme will revert to an "orderly wind-down" of the business.
Amigo said its cash position remains strong and if the above fallback solution is invoked, the seniority of the secured notes will be respected.
In late October, Amigo initiated a pilot lending programme, after the Financial Conduct Authority approved its return to lending under certain agreed conditions.
"While the initial volume of loans written was very limited, volumes have increased substantially during January 2023," it said in a statement.
"On the current run-rate, monthly originations are around GBP1 million and expected to continue to grow as the conversion rate improves through the application of the learnings from the pilot lending period."
Amigo said it retains its cautious approach to underwriting as it assesses the impact on customer affordability from the cost-of-living crisis.
Shares in Amigo were down 10.6% to 2.58 pence each in London on Friday morning.
By Greg Rosenvinge, Alliance News reporter
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