Mon, 27 Jan 2020 | BUSINESS SALE
Amigo founder James Benamor has put the subprime lender up for sale, with the company announcing Benamor is looking for a buyer for his 60.6 per cent stake.
Amigo provides loans to individuals who have poor credit ratings but can provide a guarantor for the loan who agrees to be responsible should they fail to make repayments.
However, it is being pressurised by the Financial Conduct Authority’s attempts to crackdown on the guarantor-lending industry, over concerns that guarantors often don't understand the risk they are taking.
Benamor founded the firm in 2005 and ran it for a decade, he now controls Amigo through holding vehicle Richmond Group, which is Amigo’s biggest investor with a 60.6 per cent stake.
Benamor returned to the Amigo boardroom as a non-independent and non-executive director in December, following the company’s chief executive and chairman stepping down.
In August, Amigo said it needed to overhaul its business model amid warnings of slower annual growth. On Monday, the company said it was still facing a challenging environment but that its loan book growth and impairments for the nine-months to December 31, 2019 remained within guidance.
Amigo has appointed RBC Capital Markets to lead a strategy review of the company, this could potentially lead to a sale of all or parts of the business.
However, it has said it is yet to receive any approaches and has compiled a list of alternatives to a sale of the whole business, including a sale of the UK business, the sale of certain loan books and a reorganization of the group’s entities, among others.
“We continually look to enhance our processes and are monitoring developments with a view to assessing the long-term impact on the company,” the company said.
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