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They had the chance to purchase bonds in 2020 off market and potentially save ~£100m (plus interest). If the fca didn’t block their funds that was potentially £100m plus interest on top of the £112m that could have gone to the claimants.
So your at 80p in the £ there now,
Then If amigo could have loaned £150m out the last two years that could have netted £30m a year, £60m total. - utilising the securitisation fund.
So there you go That’s £260m of the ~ £260m provisioned.
Claimants could have been paid in full. But wasn’t the path that FCA enabled.
And if the shareholders say NO we will not accept 95% dilution and insolvency it is.
The shareholders don't get wiped out though do they? The current shareholders will hold 5% of the shares in issue post raise, if they do not subscribe to the raise, if everyone subscribes, then the percentage is much bigger than 5%. In effect, we are having to stick our hands in pockets, down the back of the sofa etc. as shareholders, to fund redress, which is in effect what the judge indicated
You had in court last time, FCA Tom Smith QC saying about the bondholder cash could be used to pay claims in full etc.
Without that cash in the bank there is very little confusion about the pecking order and hopefully this time the judge will be able to see clearly that perhaps there was urgency to get this passed as before he was also eyeing up the bondholder money as if it could be used and it was one of his points used to not sanction it because there was no impending insolvancy. Well this time there is.
My guess (and it is only a guess) is because the bondholders felt that the writing was on the wall and wanted their money before administration. I dont buy into the whole BOD paying off the bonds early so that they could put money into the scheme, I think they were forced to do it.
HUR Had 200 Million in the bank though, AMGO don't after paying back the bondholders. I'm bemused as to why they paid back early, when it wasn't due for ages, this could have been used to restart lending instead, and no dilution
Drafty - Apply now. 89.7%
English refused to sanction Hurricane restructuring plan diluting share holders by 95%. There is the precedent.
The Company has done well to pay down the £600m debt last 3 years, claimants would have had nothing if they were not given the last 2 years to collect the book.
And the loan book would have just been sold off cheap for someone else to collect so every debt would still have had to have been paid. - probably with additional fees too if they didn’t make on time payments, and forget the 6 months grace amigo gave on their no extra fee model / and Covid protection.
Still it’s a shame amigo couldn’t continue lending with adjusted checks, as the claimants could have been paid in full. Fca have gone about this completely the wrong way for all parties.
Off we pop to sunflower loans for an 85% apr loan now….
This is the true picture of the options.
Gross loan book ~£200m
Impairments already booked ~ -£82m at last results.
~ -£20-30m at a guess added as set off loans.
So Net loan book good loans remaining ~£90-£100m
Value of that loan book if sold off in liquidation fire sale ~£50-70m
Current Cash ~£90m
Bonds -£50
Staff redundancies £XXm
Legal costs ~£10m
and other costs involved in winding down ~£20m
Total:
+£50-£70m loan book
+£90m cash in bank
-£50m bonds
-£10m legal fees
-£10-20m staff
-£20m misc wind down costs
Will Leave ~£50m to ~£60m for claimants if it doesn’t get passed.
About 23p in the £ for claimants if admin
Them saying 29p would be based on amigo collecting out the book.
Preferred scheme is the best option for claimants by far.
@RosieNas, I don't think the FCA have them over a barrel. Amigo could have just shutdown and nobody would have got anything. The FCA just knew that the 1st scheme was unfair. The FCA will have failed if Amigo loans winds up and shareholders and creditors get nothing.
It's still a game of chess and an RNS stating what could likely happen is not signed sealed SOA 2.
RosieNas, it is not shareholders who have caused this mess and nor was it shareholders who have taken out loans with guarantors who now want redress, keeping in mind where the SP is now, if AMIGO did raise from a placing and BOND issue then it is a viable possibility (subject to court ruling) that it (could) be accepted
I am sure they still have II's involved. I don't know the details.
First and foremost the FCA want the money to be paid in full to the crditors, secondly they want shareholders to suffer on the assumption that they all got into Amigo for a quick buck when they thought the first scheme was a shoe in. This time around Amigo are going to have to give them assurances on all that. But, nothing said in the RNS is a given. It is all there to indicate what could likely happen and as we have seen with Amigo things can change quickly. They were going to be insolvent and wind down if the first scheme was rejected.
Agree @Hereshopin with the idea that the equity raise for new lending will be required at some point but not for the £15m quoted in the RNS.
@RosieNas I feel your pain. I have been in Amigo for a long time, when the shares were more than twice the price of the 30p pre court case. Having been through all that I can still see the place for Amigo and it doing well and I don't beleive everything written in an RNS is gospel until it is Gospel.
Is that £208.88k a buy
Your attitude is far from rosy @rosie
"The New Business Scheme will require the Company to issue at least 19 new shares for every existing share in the Company. This will leave existing shareholders (unless they participate in the equity raise) with no more than 5% of the Company's share capital" This seems pretty clear to me.
If they have to do a raise, yes, but if they don't?
I can't see that they would be in a position to know that they had to do a raise and would only need to do a raise should they be allowed to re-lend.
Agree the word likely leaves this wide open still.
The equity raise could be from various avenues.
Now,, , where did I put my big box of straws.
So, the RNS is stating 15m, and likely, and a year to do it.
To me there is a lot of leeway for that to mean all or none will happen. If it is gestural to the FCA as part of the scheme then ok, but should Amigo re-lend on scheme approval and given the market conditions and the fact the company will be under a fair stricter guidline, I can see Amigo doing well.
In that scenario I see no reason to need to equity raise in the proportions suggested @HeresHopin. Is that £300m spoken about from a suggestion or does it have any credabilty?
Is Gary going to be like McNulty from the Wire..."what the f'k did i do?"...:-)
Correct mate which is why i dont know why everyone is panicking so much!
This is a great price to get in at and i think long term this 100% will be a huge multibagger, its just going to take time and patience, once we are offered especially the lower share price we will be quids in
Let them do their jobs, people need to stop whinging and moaning, nobody was winging 4 months ago when this was at 12P - you all invested in the BOD and were not ****ging them off then.
Let it ride, will be a big wave but aslong as you have a good surfboard & you dont fall off you'll be laughing at the end
I have read the RNS a few times now and just wondered if my understanding of it is correct.
So the line "The Equity raise is LIKELY to be undertaken by a rights issue for existing shareholders" would suggest that it doesn't have to be done that way by the use of the word "Likely"
It goes on to say about the 19 new shares for every existing share....
It then says "Amigo will have up to a year from the sanction of the new business scheme to complete the equity raise"
If part of the scheme being accepted is a return to lending the Amigo have a year to try not to need a fund raise. In that scenario will the rights issue and share dolution even be required?
Just wondering if anyone else has had this thought?