Provident Financial PLC - Bradford-based subprime lender - High Court approves Provident's scheme of arrangement following a sanction hearing on July 30. The company says it will now move forward with implementing the scheme, which is expected to become binding by August 5 and implemented towards the end of August.
The scheme relates to a backlog of historic complaints and associated compensation for mistreated customers. Provident anticipates all payments will have been made towards the end of 2022, when the scheme will close.
"We believed from the outset that the scheme was fair and that it offered the best outcomes for customers. The court sanction enables us to move forward with the scheme and we expect that creditors will receive redress payments in the second half of 2022," comments Chief Executive Malcolm Le May.
The High Court approval for Provident contrasts with its rejection in May of rival subprime lender Amigo Holdings PLC's own scheme to settle compensation claims. The scheme was rejected by the court after the UK Financial Conduct Authority raised objections, saying it wasn't fair to customers in its current form.
Separately, Amigo on Wednesday says it must publish its annual financial results by September 2 to avoid an event of default. Adds it is currently working on new scheme of arrangement proposals and first meeting of Independent Customer Committee - made up of eight customers, past and present borrowers and guarantors, and will be independently chaired - will take place on Wednesday.
Provident current stock price: 297.64 pence, up 1.2% on Wednesday
Year-to-date change: down 3.1%
Amigo current stock price: 8.83 pence, up 2.8% on Wednesday
Year-to-date change: up 4.5%
By Will Paige; willpaige@alliancenews.com
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Amigo (AMGO)