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Am I right in thinking that if we have rights under a RI, we can sell them (assuming someone wants to buy them) if we aren’t looking to invest further whilst holding on to our existing shares? ie we can remain invested and potentially cash out without diluting our total position (cash + shares)?
Could it be beyond the realms of possibility that after 8 weeks of negotiations with the FCA that they have said "This is the deal, take it or leave it!"
We all know the FCA play hardball, why might it have taken so long to say yes or no to the second SoA? There won't be a third SoA, so this is it. The FCA have made it clear they don't care about the shareholders.
So have AMGO been put in a position by the FCA where they have no choice but to implement what the FCA want to survive? At the end of the day it is totally up to the FCA to make the decision.
AMGO have no choice but to do what the FCA insist. Comply or insolvency!
In the meantime, we as shareholders have to decide what we want from this. I've decided what I am going to do. I don't have the funds to take up the RI and I don't want to be in this for another 4 years after first investing in March 2020. So I think I will be getting out prior to the RI, fingers crossed the sp will be kind to me. My average is 11p so I think it'll be ok.
It's been a roller coaster and like I've said before, you don't need to be holding millions of shares to have balls of steel. It's been crazy for all of us LTH's.
Good luck Amigos.
Senator (Vauxhall) needs to look at the future and become a Vauxhall Lotus Carlton. They can't put forward a rights issue as NOTHINH like I say NOTHING has been AGREED.
Rights issue has to come after SOA2 agreed by FCA (bang price goes up), goes to Court (banh price goes up), Court agrees to lending and SOA (price goes up again) THEN and only THEN will they have discussion with JP Morgan / Goldman Sachs what price to put Rights Issue.
Please DYOR. You wil NEVER EVER EVER get these shares at THESE prices EVER AGAIN!!! DUH, DUH DUH.
So many stupid crayon eating window licking muppets on here today. DUH!!
If anyone here is listening to Senators's complete rubbish you are asking to be mugged..
I have been in and out of amgo a few times. Most recent bought in at a low 7 and sold at 11.5.. this rise had no reason behind it really... to say that any RI would be at this price is rubbish.. it could be well beyond very recent highs.. amgo need only release one rns stating a bit of good news and we will be much higher.. don't be like the person who sold this morning in the 6's when he could have sold at very high 7's in the afternoon..
Freekick - When we go to court to propose a restructure and a commitment to put X into the pot that will of course only happen on a sanctioning. I think the fundraise will already be organised to happen straight after so creditors can get paid. I assume this is the plan. You can't raise funds before a sanction hearing as amigo is uninvestable until then, so I can't see how it can happen any differently. We won't know the level of dilution or what the SP basis is beyond knowing as this all inevitably build up, that 8p is a F!in beautiful bargain. Oh to have spare cash.
Insolvency is the issue Senator as you raised it effectively by suggesting a fundraise will be pinned to todays SP which is only there because of the threat of Insolvency. With a line drawn under compensation and insolvency off the table, what value then? 100M in the Bank and a green light to relend, what would the SP be?? That is the correct question to be asking and the answer is vastly more than 8p I can promise you that. I believe as we build toward the prospect of a resolution, the SP will rise to reflect the scenario not of insolvency but of a trading business and the traders will jump on this and pump it up as before. Worst case there will be windows of opportunity even if you think inevitably it won't work out.
So presumably SOA2 will have to include a RI, say of £100 million....but BOD can wait until lending has restarted and share price is 40 - 50p....therefore, at a price of say 33p aprox 300 million new shares would be needed with the share price settling around 40p as the future is secured? Simples...think I'll hold. :-)
Just use it for what it is buy low sell high ( but don’t hold to long) I bought a little today, but I don’t believe in the stock at all, it just has a big following ( no real future yet as we’ve heard nothing about new products ect) I don’t think they will ever lend again?
But no doubt the usual dreamers will pump money into it, just ride the volatility .(and hope you dont get caught in to late)
Rights Issue wont happen until
- FCA agree SOA2
- Court agrees SOA2
- Lending then allowed immediately
Then Rights Issue.
The SP WON'T be 8p after above - more like 40p/50p
Please watch the webcast and
When the sp rises from here will you come back to admit you called it wrong?
Insolvency isnt the issue. It wont be let go but current shareholders can still loose 80-90% of their investment so thats a pointless exercise.
Senator - why are you looking at the SP as a valuation of the business? The SP does not reflect the value of Amigo if it is a going concern with a forward looking business. Remove the prospect of insolvency and what do you think the value and SP is?
so what if its a year away, nothing will happen for 5-6 months and it still leaves the prospect of a £100M raise. Who in their right mind is going to drive the sp up with this coming for a co worth £38M and 2 FCA investigations ongoing. This is like a dingy becalmed in the Atlantic and will go nowhere, up down, up down going nowhere.
If the RI is a year away how does the sp behave in the meantime...presumably a day trader's paradise?
This sp will go nowhere but down as market is thinking its a £100M raise at minimum given what they said. Their ambition needs to be reigned in because you are right the current shareholder base cant provide that sort of funding so the result will be you will loose your shareholding if you cant follow your money. Given a current market cap of £38M and a £100M raise that would mean shareholders putting in 2.6x the value of their current holding to avoid dilution. So if you had £1m invested you would have to re-invest another £2.6m. This is clearly nonsense for existing retail shareholders and hence the importance of the message to management to scale back their ambition with the first funding. Its so onerous to existing shareholders its a joke. Its like the joke on Amigo is insolvent. Amigo looks insolvent because they have hit reserves with a £344M claims provision to leave a net -£117M equity. Out of this £344m they said the numbers include an expectation of using £270m in cash. In SOA1 they offered £15M upfront and some further odds and sods. No wonder they were kicked up the backside and told to go and get serious. They were taking the **** and got exposed as chancers or incompetent I dont know which. I think incompetent as GJ seems like a straight shooter but financially he is way out of his depth. Now its time for shareholders to give them a reality check and threaten them with litigation if they go ahead at £100M
Read the FT article. They have said the rights issue is a year away
When will details of SOA2 be made public and will it have to include full details of the RI?
They said they will raise £300M (debt and equity). We know they have £100m debt already available(the unused downsized securitisation facility. So I am assuming new debt of £100M and new equity £100M. They were asked how much the equity raise would be but declined to answer but this is a fair guestimat and it makes sense. A lending book with a 49% APR , the new business will be lower, lets say 30% but in any event that can support a 2:1 debt equity ratio.
Senator. Where did the £100 million figure come from? No one in their right mind will buy into that at the SP now, that is such a massive dilution. Claimants get paid first, shareholders may get a return in a few years time after taking a huge gamble, that’s if this BOD’s is capable of turning this around. Big dilemma.
Not a hope in hell. At your numbers would imply an Amigo valuation of £404m to £566M after Rights Issue assuming they raise £100M. Not a hope in hell. If you don't want to be wiped out, the best strategy is for Amigo to raise money incrementally rather than in one go at depressed prices. They should only raise £50m equity to start and live with that plus the £100M unused securitisation facility. That gives them £150M lending power. At 49% APR generates gross profit of £73M, opex £26M leaves operating profit of £47M-£50M plus say a one third amortisation of the £150M gives new lending year 2 of circa another £100M and on it goes. Raising £100M now is stupid and means you will end up with 27% of company if the RI price is 8p. If its 5p you own 19% from 100% now. If they curtail RI in first instance to 350M you own 43% at 8p and 32% at 5p. If they told the market this was the strategy this alone would lift the share price and the calcs above would be even better. They are total morons raising £100M upfront.
Yuri you say they have 250m to pay off in 13 months? Did you not watch the podcast? They are going to use the 260m in the bank to pay it off early so as to save 19m a year interest. Any that saving will be put towards the claims pot.
Yuri you have been chatting the same old rubbish for ages.... Next positive new back in the teens and some of us will be 65%+ up. And that positive news only needs to be a booked court case..
Re @Truthfactory: "It does make me wonder who the BOD are working for-the equity or the bondholders."
The moment term insolvency is mentioned - creditor' interests take precedence. That's the law.
No sensible BoD member will cross that line.
At this point it's pointless to speculate about sp (since we don't know number of shares after RI),
the only material discussion might be about company' potential market capitalization.
(depending on prospects of their business plan, how realistic it is, market environment, regulatory pressure, etc.)
a) If (?) SOA approved then there might be additional voting required.
b) Then re-lending approval is needed by FCA
FCA will give approval only if:
1] creditors interests are satisfied (customers treated fairly)
2] there's sufficient capital raised (I don't think they'll allow this to run only on debt with no chunky equity)
Those are prerequisites (let's not forget two other scenarios: insolvency/soa rejection and managed wind-down)
Raising equity without FCA approval for very dubious project seems very unlikely to happen.
Lending approval without capital sufficiency - is very unlikely too.
There might be some arrangements required (with risk of collapse at any moment).
Pile of debt is maturing in 13 months (250 mil incl. coupon), those money will be taken away.
As Senator1 suggests there's a chance of some reserves might be released back from provisions into equity.
I wouldn't expect much of a profits for new lending model because currently they have 20%+ impairment (ok, this can go down to 10%), probably 10% coupon (50% debt-financed) and 20-30 mil for other opex annually (as they scale up into lending and customer support).
Under new model it would be hardly profitable / very low return balancing close to break-even point and relatively high risk.
Therefore expecting strong business growth and healthy compounding equity (with consequent m-cap and sp increase over time) would be a very naive.
Not to mention current management and their lack of experience with forming a successful lending business.
All this doom mongering.. massive dilution, this stock is uninvestable...this is going to take a year...
Amgo LTH have heard it all and are still here for the big boom :) gla
I disagree. I think there will be a end of some sort good new which will push the share price up first then a ri. Amigo can’t raise money at this level and he would want to invest the ri will be higher then the current share price.