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Wake up HH - to attempt to blame the FCA is to fail to take responsibility for your own investment decisions.
You gambled that it wouldn’t come to this but nobody can claim this comes as a surprise after the last couple of years.
Calamari, I hope you’re right. In which case, Amigo should have no trouble backing up their claim.
This sector has seen a lot of attempted schemes that wouldn’t pay customers in full. I have never heard any of them say this would require a 95% shareholder dilution.
And if the RNS is right, why did Amigo (and it’s well paid lawyers and advisers) ever propose scheme 1 without such a dilution? And why didn’t the FCA or the judge point out that Amigo had not conformed to what Amigo now describes as a “market standard”?
No, I’m afraid this smacks of Amigo making it up as they go along. I wish Mike all the best.
HH, there was nothing disingenuous about my post. I am at a loss to understand how Amigo can say a 95% dilution is standard practice.
I assume you mean the FCA consultation on schemes (FCA doesn’t issue RNSs). Thanks for flagging that. Firstly, I wasn’t aware of it when I posted last night (it has only been published this morning). Second of all - based on a brief skim, I can’t find any reference to a 19:1 dilution being standard. Even if the consultation does propose this, it isn’t YET standard, as Amigo’s RNS said yesterday. If the 95% dilution came from FCA guidance or ICC demands, the RNS should say that, not invent some kind of industry standard.
If the last scheme taught Gary and team nothing else, it’s that accuracy matters. Amigo’s “new team” should avoid developing a reputation for double speak.
HH - finally we agree on something. RNS says that the 95% dilution reflects:
“a UK market standard level of economic interest for equity holders where creditors are not being paid in full”.
I can find no basis to support what Amigo has said.
The judge has already called out the Amigo leadership team for misrepresenting its position to creditors. I hope this isn’t another example of Amigo taking a position they can’t back up. And I hope it isn’t why Mike has gone.
Some of us were saying his salary and his LTIP were unjustifiable when he was setting out to inflict 90%+ losses on vulnerable customers. Many shareholders cheered him to the rafters at that stage.
Funny how times change…
HH - the FCA doesn’t have that authority. The court determined the outcome of the first scheme and will decide this one. The court said the first scheme, which left shareholders untouched, was unfair. RNS is clear that Amigo is responding to the judge’s findings, not the FCA.
Shareholders were happy when Scheme 1 expected customers to take a 90%+ haircut so they can have no grumbles about this RNS.
Thanks IK. You do, I assume, see the irony of your comments when it is Amigo that is attempting to renege on what it owes?
Shareholders like you just don’t get the pecking order here. You speak as though you have an entitlement to a guaranteed profit. That isn’t how investments work. You backed a dud.
Itisagame- everything you’ve written about Amigo ignores the fact that it is insolvent. It needs a scheme because it can’t pay what it owes. The healthy picture you paint is an illusion!
It has amassed cash because it’s had a year of not paying its liabilities (you shareholders should be thanking your lucky stars for the FCA moratorium!)
As it happens, I think the scheme will pass easily. I also think there’s a better than 50% chance that Amigo will trade again (if FCA wanted Amigo dead, it would already have sunk). But you paint a very one sided picture. It’s a business that has got an awful lot wrong and is in a big mess, but there’s a way out now that Gary has realised shareholders need to take some pain.
And from memory, Provident estimated the £50m would be worth 10p in £. If it’s worth 4p, that suggests total claims were actually worth £1.25 billion! Maybe Benamor was right when he said Amigo would owe over £1bn.
Does anyone know where the 4p figure came from?
Provident’s scheme got approved as part of winding up. Amigo’s is about carrying on trading. The choice was Provident closing down with £50m for claimants or closing down without £50m for claimants.
Can’t be compared to Amigo.
Indigo, Provident Financial Group still operates (Vanquis and Moneybarn). The part of the group that got the scheme is Provident Personal Credit. It has stopped lending and is winding down.
https://www.providentpersonalcredit.com/
What part of the first scheme being rejected don’t you understand?
Which part of the judge’s findings (shareholders rank below valid claimants) don’t you understand?
If you want Amigo to do a Provident, that involves shutting down the business.
Wake up!
I think that’s called a humblebrag!
As a long term sceptic, I think this is positive. There’s a way out. It’s painful for shareholders, but its been obvious for long time that it would need to be. Because it’s very painful for claimants too. Good to see a significantly bigger pot for claimants.
Cookie - I’m sorry you’ve lost £75k. That’s a lot of pain. But whilst bemoaning customers who you suggest don’t take responsibility for their decisions, you’re refusing to take responsibility for yours.
You chose to buy and hold stock in a company (and a sector) that was incredibly badly run. High risk or high return. By Gary’s calculations, the firm you chose to invest in owes £350m to vulnerable customers. By James Benamor’s calculations, Amigo owes over a billion.
In other words, the company you own shares in is broke. You are lucky your shares are worth anything and it’s only because of the FCA’s complaints moratorium that Amigo is still ticking over.
If you are sitting on a loss that big, you are in a minority. James Benamor held nearly two thirds of the stock until the lending / complaints issued were well out in the open. Anyone who has bought or topped up in the last two years has done so with no excuse for not knowing the risks.
It seems survival relies on three interlinked things:
1 - Scheme proposal being approved by creditors and court (now no doubt that a new vote is needed, as I’ve been saying)
2 - Starting lending with FCA on board
3 - Shareholders taking part in capital raise
First two steps are out of your hands. So key question for shareholders is are you willing to pump in more cash to get this through? And on what terms?
And who ISN’T willing, as a point of principle, to take part in the raise?
Franky, amongst all these examples that are allegedly online, can you cite a single one where a scheme has been rejected by the court at sanctioning hearing but then a revised scheme has subsequently been approved by the court without a further vote of the creditors? Just one single example will do. Thanks :-)