(Alliance News) - Guarantor loans provider Amigo Holdings PLC on Friday said it has secured a three-month waiver extension for a reduced funding facility as its future continues to teeter on the brink.
Amigo has sealed a deal to extend the waiver period for a securitisation facility performance trigger to September 24, from June 25. It had been extended to June 25 back in November.
Since Amigo has suspended all new lending activity, the size of the financing has reduced to GBP100 million from GBP250 million, it noted.
"All cash generation arising from customer loans held within the facility is restricted and will continue to be used during the extended waiver period extension to further reduce the outstanding balance of the facility," said Amigo, adding that the facility was drawn at GBP27 million as of Friday.
Amigo shares were trading 5.0% higher at 9.18 pence each in London on Friday morning.
The guarantor loans company said it is in ongoing discussions with the UK Financial Conduct Authority to present a revised scheme to repay compensation claims or face insolvency.
At the end of December, Amigo pursued a scheme of arrangement in order to attain certainty on the total liabilities from customer complaints. It believed that a scheme would prove to be the best vehicle for addressing customer redress claims, but admitted that the plan would not allow all claims arising from unaffordable lending to be paid in full.
The UK High Court rejected its scheme to settle the compensation claims back in mid-May. The scheme would have made at least GBP15.0 million available to a million past and present customers. There is also the potential for a further GBP20.0 million and annual contributions worth 15% of Amigo's pretax profit over the next four financial years. Some 95% of customers had voted in favour of the scheme.
By Scarlett Butler; scarlettbutler@alliancenews.com
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Amigo (AMGO)