Amigo Holdings PLC (LSE:AMGO) said it is still short of raising the £45mln of funding it needs to continue with its new business plan, but has made progress with a pilot lending scheme.
However, the guarantor loans provider has received a “number of expressions of interest” to support its initial £15mln capital raise to pay creditors that is the key condition of the scheme of arrangement sanctioned by the High Court last summer, with the other £30mln to be allocated to growing its lending business again.
Funding discussions are ongoing Amigo said, with the board seeking “the best possible outcome for creditors, employees, shareholders, and other stakeholders”, having said earlier this month that it was not able to secure a cornerstone investor.
If it is unsuccessful, the business would be wound down.
In October, the Financial Conduct Authority (FCA) approved the company’s return to lending via a two-month pilot programme, which was extended earlier this month.
Volumes have “increased substantially” this month, with monthly originations “around £1mln” and expected to continue growing, with a “cautious” approach to underwriting.
Third-party 'Skilled Person' testing of lending outcomes has begun.
Following the end of the pilot lending phase, the FCA will consider the impact on consumers of Amigo returning to lending on a wider scale, and whether the results of the outcomes testing demonstrate that Amigo is able to continue to meet the regulator's expectations.