(Alliance News) - Provident Financial PLC on Monday said its customer redress scheme was backed by its creditors.
Subprime lender Provident said its scheme of arrangement was overwhelmingly backed in a vote on Monday. It said that 98% of creditors who attended the vote, backed the measures.
Provident added that 428,000 of its 4.2 million creditors voted.
Provident has offered to pay GBP50 million in compensation to customers under the scheme, after it sold loans without carrying out affordability checks. The loans were sold by Provident's consumer credit division, under brands including Satsuma Loans, Glo and Greenwood.
"The scheme requires more than 50% of all creditors by number who vote on the scheme to vote in favour, and the total value of their claims to represent at least 75% of the value of the claims of all creditors who vote. These thresholds have been met, and consequently the scheme has been approved by the creditors," Provident added.
The High Court will now consider the scheme at a hearing on July 30.
Last week Wednesday, the Financial Conduct Authority criticised Provident's scheme of arrangement to resolve customer complaints, although it will not appear in court to oppose it.
In a letter to the company, the regulator said that customers "stand to receive significantly less than the value of their claims" under the scheme. The FCA also said it was concerned about a low voting turnout of around 10% so far, and that Provident had not negotiated with customers.
But the FCA decided not to oppose the scheme in court as the consumer credit division would go insolvent if it does not proceed, and customers may not receive any compensation.
Provident shares closed 3.2% lower at 252.00 pence each in London on Monday.
By Eric Cunha; ericcunha@alliancenews.com
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