(Alliance News) - Embattled lender Amigo Holdings PLC on Friday said its creditors have voted to push forward with its new business scheme.
The scheme - which is being proposed to settle customer claims following probes from UK regulators into mis-sold loans - required at least 75% of the claims of all creditors vote for it. Amigo noted, at a meeting held on Thursday, over 88% of creditors by number approved the scheme.
It also said, however, that 83% voted for Amigo's wind down scheme.
Now, the guarantor loans provider will ask the courts to approve the new business scheme, but should it be turned down, will ask for the wind down scheme to be approved.
The court hearings will be held on May 23 and 24.
Amigo said its shares will be suspended during the period of the court heading "to avoid the possibility of asymmetric information in the market". It will request the suspension starting May 23 until it updates the market.
Shares were up 3.5% at 6.92 pence in London on Friday, though remain 70% lower over the past 12 months.
Chief Executive Gary Jennison said: "Our customers have voted in favour of the New Business Scheme, which the board of Amigo believes offers the maximum possible redress to creditors. This is an important step to address the liabilities that arose from historic lending practices under previous management."
"However, the new business scheme still needs to be sanctioned by the court, and a significantly dilutive equity issue is needed to fund the scheme and 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)