Tue, 09 Jun 2020 | BUSINESS SALE
UK subprime lender Amigo Loans has abandoned its plans for a sale after a potential bidder pulled out of the deal, with no other offers on the table. The company’s chairman Stephan Wilcke has also resigned, Amigo announced.
Bournemouth-based Amigo has said it has decided to cancel its final dividend for the year ending March 31, citing a material rise in complaints and costs associated with resolving them. It has reached a voluntary requirement with the UK Financial Conduct Authority (FCA) to work through and resolve its backlog of complaints by the end of June.
The company expects that clearing the backlog of complaints, which have principally been made in 2020, to cost at least £35 million, but said that it could be “materially higher”, due to a significant increase in customer complaints over recent weeks. The FCA said last week it was investigating Amigo’s creditworthiness assessment process.
Amigo announced in May that an unnamed buyer was interested in acquiring the company with an offer of 20.9 pence per share, or £100 million, compared to its current market capitalisation of £61.5 million. The deal was contingent on founder 61 per cent owner James Benamor approved the deal and ended his attempts to replace the board.
However, while Mr Benamor agreed not to pursue attempts to replace Amigo’s board, he has publicly stated that he would oppose the sale of the company. Shareholders were told by Amigo on Monday that the bidder was withdrawing from the process due to “the current market environment”.
Amigo provides “guarantor” loans to people with poor credit histories, providing they have a friend of family member willing to cover their repayments if they fall behind. Its share price and costs have been significantly impacted by complaints and regulatory scrutiny over recent months.
In its most recent accounts, to the year ending March 31 2019, Amigo reported revenue of £270.5 million, up from £210.6 million in 2018. Its total assets at the time were valued at £796.3 million, with total liabilities standing at £548.4 million.
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Long established practice, priding itself as a trusted law firm since 1994 and services over 1,000 client a year.
This law practice is situated in Bristol. The practice undertakes a variety of work – both publicly funded and privately paid.
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