(Alliance News) - Shares in Amigo Holdings PLC soared on Monday after the guarantor loans provider noted that the UK Financial Conduct Authority does not intend to appear at the scheme sanction hearings.
Shares in Amigo were up 20% at 5.46 pence in London on Monday morning.
The scheme is being proposed to settle claims following probes from UK regulators into mis-sold loans and the way that Amigo dealt with customer complaints.
A revised scheme was submitted after the FCA decided to appear at the court to oppose the original plan in May last year, on the grounds that it was not fair in its current form.
"The FCA has made clear that it will continue to engage closely with Amigo, taking into account the outcome of the sanction hearings," Amigo said on Monday.
It noted, however, the FCA has told the company it does not consider it "necessary to appear at the sanction hearings either to oppose the schemes or to present any evidence of its own concerning the schemes unless the court requests or otherwise requires assistance from it."
The FCA has also concluded that there has been a "significant improvement in the fairness" of the schemes compared with the previous one. However, it reserves the right to intervene "if facts and circumstances change".
"If the scheme is sanctioned by the court, the FCA has confirmed that the firm could resume lending if it meets certain conditions. These include meeting the threshold conditions and testing of the firm's new lending system being completed to the satisfaction of the FCA," the FCA said in its own statement Monday.
Amigo Chief Executive Gary Jennison said: "We thank the FCA for its confirmation that there has been a significant improvement in the fairness of the schemes compared with Amigo's first Scheme, which was rejected by the court in May 2021.
"There remain significant obstacles to overcome, including the need for a significantly dilutive equity issue, to recapitalise the ongoing business given the requirements of the schemes for the transfer of virtually all existing assets to the redress creditors."
By Lucy Heming; lucyheming@alliancenews.com
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Amigo (AMGO)