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(Alliance News) - Amigo Holdings PLC on Friday said it expects the cost of its voluntary requirement with the UK financial regulator, related to customer complaints, to be substantially higher than the original estimate of GBP35 million.
The Bournemouth-based guarantor loan company on Friday said it has entered into an amended voluntary requirement, or VReq, with the Financial Conduct Authority. Amigo has agreed to reach a position by October 30 where all customer complaints are dealt with within eight weeks of them being made.
This comes after it sought a deadline extension to clear around 9,000 customer complaints in June. The extension granted means that the number of complaints covered by the VReq will increase, raising the cost "substantially higher" than the original estimate of GBP35 million.
As a result, Amigo said it will make a "material increase" in its provision for complain resolution in its financial 2020 accounts. It said it expects to release its results for the financial year that ended March 31 on or before July 23.
The company's liquidity remains strong, it said, with a cash balance of over GBP136 million as of Tuesday this week.
"Amigo has sufficient financial headroom and cash on its balance sheet to continue to fund operations and support its customers during this challenging time," the company said.
Amigo's free float of shares currently sits at 36%, with Richmond Group Ltd, its majority shareholder, continuing to sell 1% of the company every trading day. The FCA requires premium listed companies to maintain a free float of at least 25%.
Amigo shares were up 59% at 13.50 pence early on Friday morning in London. However, the stock remains down 81% since the year began.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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