Amigo issues letter as it progresses creditor schemes

(Sharecast News) - Amigo Holdings updated the market on its proposed scheme to resume trading on Monday, reporting that ALL Scheme - the wholly-owned subsidiary incorporated for applying for a scheme of arrangement under the Companies Act - was today issuing the Practice Statement Letter to current and former customers of Amigo Loans, and to the Financial Ombudsman.
The London-listed guarantor lender said the letter would provide information to the Financial Ombudsman and to customers who believed they might have potential redress claims in relation to historic loans made by Amigo Loans before 21 December 2020.

It said the letter explained two proposed Scheme options, being a 'New Business Scheme' contingent on new lending restarting and Amigo completing a successful equity raise, and a 'Wind-Down Scheme', which would involve the managed wind-down of the Amigo Loans business.

As it had previously announced, the scheme company intended to ask redress creditors to vote on both options, adding that if both options were approved, the scheme company would then submit both options to the court for sanction.

The court would be asked to consider the New Business Scheme first, as the preferred option of both the board and the independent customers' committee, before it considered the Wind-Down Scheme.

If the court did not sanction the New Business Scheme, it would be asked to sanction the Wind- Down Scheme as a fall-back solution.

The court hearing for the scheme was currently scheduled for 16 February.

Amigo said its board and the independent customers' committee were both of the view that the New Business Scheme would provide a better outcome for redress creditors than the Wind-Down Scheme.

"We are pleased to be writing to customers with a new scheme proposal to meet redress claims relating to historic loans," said chief executive officer Gary Jennison.

"In shaping the proposal, we have listened closely to the views of the independent customers' committee.

"The ICC has agreed to the terms of the offer, which provides a choice between a New Business Scheme and a Wind-Down Scheme."

Jennison said the New Business Scheme, contingent on a successful capital raise, offered redress dreditors a "significant improvement" on the terms offered under the first scheme, adding that it was the preferred choice of both the independent customers' committee and the company's board.

"Shaping a new scheme has been a long process and I'm grateful to all stakeholders for their patience.

"We recognise that significant hurdles remain, but today's letter is a vital next step towards dealing with our historic complaints liability and finding a fairer resolution to righting wrongs of the past.

"We hope a successful new Scheme will also allow a changed Amigo, under a new management team, the opportunity to bring forward a new, regulated lending proposition for a segment of the market where options are diminishing and demand remains high."

At 0949 GMT, shares in Amigo Holdings were up 4.49% at 6.33p.