Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
Hi Franky,
I'm trying to be ambiguous with the share price. I have my own ideas where it will be prior to court, after sanctioning and what the raise will be at but i'm keeping those figures to myself as it is just an educated guess.
What I think which disagrees with most that I read here and indeed many on the infamous twitter group is that the SP rising wasn't the problem last time. If we were 25p but were being diluted 1/1 essentially cutting our holding in half there isn't an issue.
Last time the argument was 30p no dilution.
This time it is ?p and ? dilution.
Agree Amigo will try to keep the lid on it but realistically keeping this below 10p isn't possible IMO.
The Preferred Scheme / New business scheme - https://www.amigoscheme.co.uk/docs/PracticeStatementLetter.pdf
This scheme not only provides upfront money that the committee wanted (£112m) it also satisfies the judges concerns during case one.
• We are balance sheet insolvent without the scheme and without sanction we will go for the wind down scheme or insolvency directly after not being sanctioned.
• The committee negotiated this offer over many months with Amigo, Amigo were described as transparent by the independent chairman. The offer not only shows they have done ALL they can for claimants and the BOD really want to offer a fair deal.
• Finally part of the new business scheme is stringent on raising £70m of new capital from investors within 12 months of the scheme being sanctioned. This dilutes shareholders the same way claimants are being diluted in their claim amount.
As mentioned earlier it is very unusual for scheme of arrangements not to be sanctioned by the court anyway but by taking the time and effort you can really see Amigo are focused on the right result for everybody.
This scheme is expected to return creditors 42p/£1 – This relates to 42% of what they would be entitled to claim.
Share Price Movement
Might be contentious but as we know shareholders and investors are mostly here to make money. The uncertainty as mentioned put a lot of people off but the facts are that on the run up to the last court case the share price reached 30.3p from a similar level we find ourselves today. There is too much uncertainty to predict accurately where the share price will go this time so I will not try but let me just say that there is great opportunity here as a well known company with an experienced board of directors, newly developed products, £300m of funding and a nation of sub-prime customers crying out for help at the end of a global pandemic.
There has been a recent seller in Bybrook that had over 12% of the company and have sold down to most recently announced Tuesday 18th January to under 3%. You might think this is a bad thing but I feel it is good on two accounts
• Bybrook are well known to invest in distressed bonds, their purpose was not to invest but to make money off the situation, when Amigo recently announced they were going to pay the majority of the bonds off that is when the selling started
• They seem to be willing to sell the amount anything down to 6p (which looks to be the bottom) also when they sell their last 2.6% that pressure then releases and we see a natural rise back to where we were before they started selling (Around 12p if I’m not mistaken)
Dates for the diary
• 1st Court Case – 16th Febuary
• 2nd Court Case – Late April
https://www.amigoplc.com/investors/investor-faqs
I know there are certain complexities with Amigo that would put a newbie investor or even a risk adverse investor off putting money into AMGO but I wanted to summarise on why I think Amigo is a great investment not just for the short term but for the much longer term.
Scheme Of Arrangement
As no doubt you’re aware if reading this Amigo is looking to settle all complaints dating back from 2005 with a scheme of arrangement.
The first scheme was proposed last year and was for a maximum of £35m with a portion of future profits. This scheme was voted in favour of by creditors by over 95% and the ombudsman. FCA initially stated they didn’t approve the scheme but would not be going to court to appose the scheme. This stance changed the week prior to the second court hearing where they did attend court and the rest is history. (One of the only schemes not to get sanctioned by a court)
The scheme not getting sanctioned was actually only down to a few factors that have imo been addressed in the new scheme;
• Amigo claimed it would be insolvent on the basis of the scheme not being sanctioned, the court saw no evidence to support amigo going insolvent in the short to mid term.
• Claimants were not properly consulted and given a take it or leave it option so the majority vote could not be seen as an overwhelming reason to sanction the scheme.
• Claimants were taking a large percentage loss on their valid claims where as shareholders would retain full equity stake in the business.
These 3 reasons were why the judge decided not to sanction the scheme. See full scheme judgement here - https://www.amigoscheme.co.uk/docs/archive/AllSchemeltdJudgement.pdf
All documents related to the previous scheme before/after ruling can be found here - https://www.amigoscheme.co.uk/legal-documents-archive
Right onto the new scheme –
It was announced shortly after Amigo would not appeal the ruling and instead work with the FCA with the judges comment to revise the scheme and come back to where we are today with Scheme 2.0.
Firstly economically we’re in a much better position as collections through Covid were better than expected. We also saw Provident successfully get their scheme of arrangement through the court, where again FCA didn’t agree with the scheme but didn’t change their stance and turn up to court. I have my own views on the Provident scheme and what has happened since but will leave that out of here for now.
The new scheme has been developed with a customer committee made up of 8 Amigo Customers (current and former, borrowers and guarantors) and an independent chairman. There was a really useful video that come out this week that explains how the negotiations took place and how 5 original proposals (plus any extra ideas from the committee) was whittled down with the options we have today.
MUST WATCH - https://www.youtube.com/watch?v=VQpJkN74gSw
Claimants are encouraged to go direct through the scheme.
Every sale has to end, unless you're buying a sofa with DFS.
The worth of your claim. (Interest + 8%).
Bear in mind with a loan depending on term and amount, your interest could be more or less than the original amount you borrowed.
Just gone through
No that isn't right.
Claimants aren't choosing a scheme they can vote for them both or against them both or one/other.
Both will be options, both will be voted over 90% I expect. Claimants should be over the moon the committee has done an amazing job for them.
Just remember Nisa if they wind down the business of Amigo Loans Ltd our shares don't just vanirsh into thin air.
Plus shares are held in Amigo Holding Plc not Amigo Loans Ltd.
Last time after court case 1 we were at 16.2p on close.
Not actually fact.
11th Sept 2020 12.06p
14th Sept 2020 12.56p
I get your point but there was other factors in the share price movements. Generally a seller running out of stock to sell with the same volumes means a share price rises.
Guess who is back....
But he is right the biggest risk is they go bust, at this stage i don't see who that benefits but he has correctly stated a fact that it the biggest risk. If we stick to facts he will be welcomed with open arms.
All will be revealed in due course.
Buy - 5.8948
Sell - 5.8938
500k dummy sell and buy and literally no spread. BOOM!
Gary is a bit insecure about the hair loss lippy.
Best leave that for the AGM.
Does anyone here know if Umar Kamani is still invested in Amigo Loans or have a direct email for him?
How about a ginger nut?
Bybrook 10m left as of Tuesday
Volume over last 2 days - 22m and volume today 5m.
When they are out the price will naturally rise and rise quickly.
Camel always had a vendetta towards Amigo, was putting them into disrepute when promoting companies charging 150% APR plus. The day she got put in here place by the judge was up there with the best i've ever had. Unfortunately that case was better than the second one.
On the plus side we've been there and followed the outcome to the letter so I expect court case 3 & 4 to go according to plan. Plan being great for creditors and amigo alike.