Proposed Directors of Tirupati Graphite explain why they have requisitioned an GM. Watch the video here.
Offered in seriousness, a revised scheme addressing judge’s comments:
More money up front - double offer to £30m from cash in bank. Plus any saving from balance transfer pot to be transferred in full to historic creditors. Bondholders accept some risk and they get to vote with their feet if they don’t like it. They may scupper the scheme in this way.
Then, a shareholder dilution - say 50%. Remaining 50% held in trust for creditors. Lending and dividends resume for all. Trustees appointed by the court manage and distribute dividends to creditors until creditors have got back, say, two thirds of their entitlement via combination of dividends and, ultimately, sale of the 50% equity stake. The sooner the creditors are paid back, the sooner the shares are returned to the open market (like bank rescues). Trustees can only sell up early if they conclude it is in creditors interests (e.g. real risk of future insolvency). Exact terms to be hammered out by expert creditor representatives (paid for by SchemeCo) as per paragraphs 109 and 111 of judgement. Shareholders to vote on this at an EGM on a “it’s this or bust” basis so they can scupper the scheme (and opt for wipeout) if they don’t like it. Shareholders face same dilemma as creditors and take a decent haircut.
Creditors vote on the new scheme on a “it’s this or bust” basis and can scupper the scheme (and opt for nothing) if they don’t like it. Seems unlikely after first vote. Creditors take a decent haircut.
I’d like to see exec LTIPs go too. Not only are they unfair in the circs but Amigo’s performance at court doesn’t suggest the team deserve a big reward. But at least they’d be affected by stock dilution.
There’s no deal to be done with FCA. Para 111 of judgement says:
The FCA does not (as a matter of policy) negotiate the terms of schemes of arrangement with regulated firms and it has not sought to do so in the present case.
No need for insulting me if you can answer the question HH.
Paragraph 129 of the judgement:
The Company did not seek to argue that the choice presented in the Explanatory Statement was anything other than binary. The Company’s position was that it was entitled to convey this message: the directors had decided (and consistently stated in public communications) that if the Scheme failed Amigo would go into a formal insolvency process.
Paragraph 132 of the judgement:
I consider that the Explanatory Statement gave the false impression that absent THIS scheme being passed, the directors would have no choice in the matter and that insolvency would be automatic and imminent.
So I’ll ask again. If insolvency does not follow and improved proposals are put forward, Amigo and its senior leadership must by definition have been inaccurate or misleading in what they told creditors and the court.
HeresHopin - plenty of shareholders have criticised customers for not being accurate when applying for a loan. Is it too much to ask that we get an accurate account of things from the senior leadership of Amigo and their highly paid Freshfields lawyers in court?
Hard to disagree with that rickmeister. They’ve shot their bolt on insolvency:
“Robin Dicker QC, representing Amigo, told the court last week: “In our submission, it’s inevitable that if THIS scheme is not sanctioned, Amigo Loans Limited will go into administration””
https://www.bournemouthecho.co.uk/news/19326341.amigo-go-administration-losing-high-court-case/
Any attempt to revise the scheme - which I think is best outcome - must involve GJ and the board admitting that their submission in court was not true.
It wasn’t touched on at all - so I think 24 June debt deadline is still a major outstanding question.
Hard to believe Amigo would forget to mention it. Surely, given they had well over a week after FCA announced its objection, Amigo would’ve thought about how to rebut the FCA? Even if they didn’t submit papers to the court in advance, Gary and team would’ve been firing notes off to their barrister immediately? Amigo’s barrister was basically just left to say it’ll go bust because that’s what the board have decided. It beggars belief.
Whatever I think of this scheme, I’ve never thought Gary was stupid. So what’s going on?
Mousekewitz, after your ludicrous threats of legal action, I’m doing my best to avoid direct interaction with you.
But you keep making references to my mum. So I just wanted to say I’m not ashamed of keeping in close touch with my very elderly mum in the middle of a global pandemic. If you want to mock me for that, it says more about you than me. Best of luck.
I’m still here folks. Glad you’re getting a bit of respite but my concerns about the scheme remain.
Of course it looks like some major investors don’t share those concerns - or at least they think the potential benefit outweighs the risk. Fair enough.
I still think the scheme is extremely unbalanced and unfair and would require FCA to turn a blind eye to enormous competition issues. That’s why it’s not for me, whatever Bybrook and JPM think.
Best of luck all.
GrimRip. I suppose it falls to me to make the screamingly obvious point that that particular saying is really not a good one to be promoting when Amigo is currently going cap in hand for a scheme to deal with its own malpractice. Amigo certainly doesn’t appear to think it should have to lie in the bed it made...
And I’d say the regulator and ombudsman are a pretty good indicator of how legit the complaints are. But if you really don’t want to take their word for it, the Amigo BoD also agrees that these complaints are VALID.
I’m afraid I do believe what I’ve written. Can you give me one example of false information I’ve spread?
I don’t encourage people to lie. I’m just not naive / judgmental enough to ignore the reality that desperate people on hard times might make unwise attempts to borrow. I don’t think that makes them cheats or no hopers (and I don’t think it’s a good look for shareholders to insult the customers they want to deprive of 95% of what they’re owed).
Firms like Amigo are subject to clear rules which require them to check people can afford the debts they apply for. They clearly broke those rules on a large scale.
It seems lots of other lenders broke them too and many of them are not around anymore. Amigo and it’s shareholders seem to expect the FCA to treat them differently to how other lenders were treated in the same boat. I continue to think that’s a huge ask that won’t succeed - but of course I may be wrong.
Honewood, if you (and Amigo) think all of the provision will be used for balance adjustments, then it’s a nonsense to tout the £35m figure around. If that is true (and Amigo must have modelled it) then the the pot for payouts cannot be any higher than £15m and it would be cynical to keep mentioning £35m as a realistic possibility. Amigo can’t have it both ways.
There’s still plenty of talk on here about this problem being punters trying their luck and CMCs rinsing the firm. That is a complete red herring. Amigo admits this scheme is about its inability to cover the costs of VALID claims arising from Amigo’s own wrongdoing.
Amigo (or its shareholders) cannot claim both that this problem is down to CMCs / greedy customers AND that Amigo 2.0 will be a break from the problems of the past.