Amigo Holdings PLC (LSE:AMGO) evidently finds itself friendless as last-ditch attempts to raise rescue funds looks set to fail, and, the lender said it is now advancing the process to wind down its operations.
Any investors still holding Amigo counted the day’s 25% drop in the London listed share price.
“As we announced in June, while we have been engaging with potential providers of investment to allow the business to restart, the Board of Amigo considers the likelihood of success to be very low,” chief executive Danny Malone said in Thursday’s results statement, for the financial year ended 31 March.
Malone added: “These results come at a very sad time for Amigo.
“Despite the hard work and dedication of all of Amigo's employees, economic and market conditions made it impossible for the company to raise the capital required to continue lending.
“Our priority now is to progress the orderly wind down of the business, ensuring we are able to maximise payments to redress creditors, whilst continuing to provide the best level of service possible to our customers and support for our staff.”
The wind down will leave no value for shareholders, Amigo noted.
Changing hands at 0.6p per share on Thursday morning the lender has a market value of £2.85 million.
The Bournemouth-based company, which gave high interest loans (up to 49.9%) to customers with low credit scores so long as they put up a friend or relative as guarantor, listed in London back in 2018 in a float that saw more than £300 million trousered by founders and senior staff that sold shares.
Priced at 275p the IPO set a £1.2 billion valuation, and, after briefly trading up to 297.5p in late December that year, the London shares have been on the slide ever since.
The lender had spent years battling mis-selling claims, resulting in a £97mln scheme being set up to pay off its claimants.
Unable to secure new funds a planned reboot of the company proved unsuccessful.
Amigo was originally set up by James Benamor who previously ran loan brokerage Richmond Group, also from headquarters in Bournemouth, and, in 2008, ‘starred’ in Channel 4’s “Secret Millionaire” business reality TV show.
In June 2023, Amigo revealed it could see a potential lifeline as it entered into an exclusivity agreement with a shareholder, Michael Flemming.
It gave Flemming the right to explore avenues that could secure new loans for the beleaguered firm. He was given until 6 September to come up with a last-ditch proposal to save the business.