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"Very sad day" as Amigo Loans shuts down

Published: 08:36 23 Mar 2023 GMT

Amigo Loans
Adios Amigo

Amigo Holdings PLC (LSE:AMGO) is to shut down after being told there was little chance it could raise additional capital in the current market.

The Bournemouth-based guaranteed loan provider has been battling with mis-selling claims for the past two years resulting in a £97mln scheme being set up to pay off its claimants, a fund which is unaffected by today’s decision.

Because of the lack of new funds, Amigo said it is now reverting to what it calls the "fallback" solution to its problems.

Subsidiary Amigo Loans will stop lending immediately and be placed into an orderly wind-down with any surplus assets transferred to the creditor scheme.

“In due course, all [assets] will be liquidated,” it said, adding that the shares in the company will have no value.

The wind-down of the business will see the existing loan book continue to be collected and last for approximately 12 months, it noted.

In a statement, Danny Malone, the company's chief executive, commented: "This is a very sad day for all our employees who have worked extremely hard to address historic lending issues and rebuild a new Amigo.

“ A successful scheme which provided a fair financial offer to Scheme creditors was always the only way shareholders could retain any value for their shares.  

"Clearly the economic and market environment has moved against us considerably since our Scheme, formulated in late 2021 / early 2022, was sanctioned last May.”

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