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These numbers show that thereās no incentive for creditors to take a revised scheme. They have Ā£97m lined up for claims already under the current scheme. I know exactly which way I would vote as a creditor.
Agree SOA3 is a waste of time and effort. The current scheme is the only game in town.
I agree. I am more convinced after momajidās posts than I was before that trying to get the scheme reopened and amended is futile.
BoD needs to focus 100% on complying with the terms of this scheme, which is the one Amigo asked for. I suspect they know that, and last weekās RNS was a gesture to show everyone that they have considered every option in the event of wind down.
Whatās the confusion? 9billion new shares will be issued in order to raise Ā£45m.
Thatās 0.5p for each new share. Shareholders need to buy 19 new shares for each existing share. So thatās 9.5p per current share in order to take up your rights.
This is very much in line with the indications that the BoD has been giving for months.
I donāt disagree that this scheme is very much weighted against shareholders and I said so at the time (you can check). But momajidās and ASAGās arguments were heard during the sanction hearing and found to have no merit.
Shareholders have kept the board and their scheme in place this long. Not a single vote was cast against Gary or Jonathan at the AGM six months ago, including by Mr Majid and his ASAG colleagues.
This scheme is the only game in town - the firm will succeed or fail as the RI succeeds or fails.
Grateful to momajid for reposting the judgement which makes clear that all of his arguments were considered by the judge and rejected.
BoD would be crazy - and bound to fail - if they try to reopen those points, which the judge called āmisconceivedā and āfancifulā.
Beastly, where I think responsibility lies is neither here nor there. Amigo accepts liability. It accepts that it owes almost Ā£400m to its customers. The FCA has found that Amigoās actions warranted one of the biggest fines it has levied in recent years. The ship you are trying to re-board sailed a long time ago.
Momajid - I accept what you say about levers at shareholders disposal. But the provisions of the scheme, including the dilution and the need to raise around Ā£40m have been public for an age. Why have you lot waited till 10 weeks before deadline to call your EGM?
At the AGM last September, four months after the scheme was sanctioned, the chair and (former) ceo were reappointed unanimously by shareholders. Three other directors were reappointed by more than 99% of votes.
The exact same scheme was in place then. So this doesnāt look like a stand against the scheme in principle, it looks like a reaction to the fact that a bet shareholders took hasnāt come off.
Momajid- if youāre going to apportion blame, look in the mirror. Nobody forced you to buy or hold Amigo shares. Itās been obvious for years thatās this is a roulette option.
Amigo was lucky to get a second bite of the cherry after the first scheme failed. If shareholders didnāt like the proposal that Amigo itself put to creditors and asked the court to sanction (or the uncertainties that came with it), they have had months to sell out. Shareholders have sat with their holdings knowing what the situation was. Itās no good saying you want to redesign it now that some entirely predictable difficulties have arisen.
The conditions attached to the scheme have not changed since the court sanction. Nor have the consequences if those conditions are not met. This is the scheme Amigo asked for and itās the only one it has to work with.
What I donāt understand is why the firm doesnāt appear to be factoring in uptake from retail investors in its calculation of whether it will get to Ā£45m. How many of you will chip in 9.5p per current share to get this over the line?
Franky, read yesterdayās RNS, which sets out the legal position. The scheme is an agreement between a firm and its creditors. Any changes to the existing scheme would need to be approved afresh by all eligible creditors. It is a matter of basic law that it canāt just be nodded through by a committee.
Eye of the bull, claimants donāt get nothing in administration. The Scheme said theyād get 30p per Ā£ in administration and 40p through the Scheme (approx). So theyād still end up with a payout, just a little smaller than with the Scheme.
A scheme is a court-approved agreement between a company and its creditors. Any SOA3 needs to be approved by creditors - itās not just for the court to sign off a new arrangement.
The SOA sanctioned last May had previously been approved by the required numbers of creditors before going to court. I donāt see how thereās time for that whole process to run again before end of May. Under the terms of the court sanctioned scheme currently in place, creditors have voted in favour of Amigoās proposal that the company goes into wind down if the extra Ā£15m cannot be provided to the pot for creditors. Donāt forget, the creditors committee explicitly opted for cash now, not a bigger pot later based on performance.
I would be surprised if the Ā£45m did not have some importance, perhaps in providing sufficient liquidity for Amigo to meet its basic requirements as a viable lender. So I donāt know how much leeway there is on trimming it.
The FCA has already provided a complaints moratorium that lasted 18 months, permitted the return to lending, and waived a Ā£73m fine. I donāt see how it can credibly allow Amigo to have another go at redesigning its scheme. That would set a very difficult precedent for other firms that they donāt have to come up with a credible scheme first time.
Amigo needs to deliver against the scheme it offered creditors and the court signed off on last year. Otherwise it needs to be put out of its misery.
LTHcine - selective memory there. I said that Amigo wouldnāt be allowed to give claimants a 90% haircut, fully protect shareholders, and then carry on trading.
I was absolutely right - FCA and High Court judge kicked out the first scheme and thereāll now be a 95% dilution for shareholders who donāt participate in the fund raise, at least part of which will go into the claimant pot.
Largey - there is an ongoing and current discussion about the rights issue which is a requirement of the scheme. My comments are in response to shareholders feeling sorry for themselves and blaming borrowers for the consequences of the dilution. I think itās important to be clear about what caused this situation.
So Iāll stop making the point about poor practice when shareholders stop playing the victim.
Deano, there is some coffee that you need to take a good long smell of. I am worried you havenāt fully grasped the extent of Amigoās bad practices.
Firms like Amigo donāt go around recognising liabilities of hundreds of millions of pounds just because a few people decided they didnāt want to repay their loans.
This is people being given loans without proper checks that there was little realistic chance they could ever have repaid - and incurring huge amounts of interest as a result.
Amigo has acknowledged its culpability for that. Youāre fighting arguments long ago conceded by Amigo itself.
If Amigo was paying its debts in full, it would already be bankrupt and shareholders would have nothing. I do think 19:1 is tough on shareholders, but itās a better outcome than no value preserved at all. And that outcome has been a distinct possibility ever since James Benamor started blogging in March 2020 (if not even earlier).
Who knows whether borrowers and guarantors knew what they were doing. Shareholders certainly should have.
Your last comment suggests you think itās the borrowers and guarantors who should take the pain. Amigo tried that and the court kicked Gary and his expert new team into next year.
So tell us - who should take the pain?