7th Sep 2020 11:44
(Alliance News) - Amigo Holdings PLC on Monday responded to social media comments made by founder and former chief executive James Benamor containing an extract of terms for investment vehicle Richmond Group Ltd to acquire up to a 29% stake.
Benamor on Friday last week tweeted a picture showing what he described as an "excerpt of the important terms from the irrevocable contract I have today signed with our broker".
The agreement, effective from Friday, was for Richmond's broker to purchase Amigo shares at a market rate up to 20 pence per share if Benamor became chief executive of Amigo again. The irrevocable instruction lasts either until Richmond holds a 29% stake in Amigo, 30 days after Bemamor is installed as Amigo CEO, or when the instruction expires in February 2021.
Shares in Amigo were down 1.6% at 12.50 pence in London late Monday morning.
In April, Benamor had called for the entire board of the guarantor loans provider to be ousted, claiming Amigo was "committing slow motion suicide". However, shareholders rejected Benamor's resolutions. Amigo and Benamor settled their dispute in June, with Benamor deciding to sell his entire 61% stake in the company.
In August, Amigo said it had received a general meeting requisition notice from Richmond to appoint Benamor as a director of the company. The notice also proposed removal of Chief Financial Officer Nayan Kisnadwala, Interim Chair Roger Lovering, and current CEO Glen Crawford as directors of Amigo and resolutions in relation to Amigo's unit Amigo Loans.
Richmond has since withdrawn its resolution to oust Crawford as CEO. Crawford has, however, made it clear to he is not prepared to work with Amigo in any circumstances where Benamor returns to Amigo's governance structure in a position of influence.
Amigo previously had said that Crawford's decision to return as CEO was based on the clear statement from Benamor that he would completely sell down Richmond Group's stake in Amigo.
Responding to Benamor's tweet, Amigo pointed out that Richmond's offer to start buying shares is conditional on Benamor becoming CEO of Amigo and not on his election to the Amigo board, adding that even if Benamor is appointed to the board at the upcoming GM he will not automatically be made CEO.
"His appointment to the position of CEO requires the approval of the board of Amigo and the subsequent approval of the [UK Financial Conduct Authority]. There is no guarantee approval will be granted," Amigo noted.
Amigo further highlighted that Richmond would in any case need FCA approval to acquire 20% or more of Amigo and become a controller of a regulated entity, with no guarantee of approval, which would limit the Richmond share purchase to up to 20%.
"In the absence of the required prior approval from the FCA, execution of the irrevocable instruction would result in [Richmond] committing a criminal offence when its shareholding exceeds 20%," said Amigo.
Amigo also commented on Benamor's speculation that that company's board may be considering a share buyback, saying "this is not the case" and it has no plans at present to buyback any of its shares.
By Anna Farley; [email protected]
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