The next focusIR Investor Webinar takes places on 14th May with guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Https://www.marketscreener.com/quote/stock/AMIGO-HOLDINGS-PLC-44458576/company/
Zzzz....
That' s not how it works. All people get back is the interest paid. If they still have principal outstanding, it's net off at 100%. If not then it's 17p in the £. The pot's the pot (broadly).
I'm telling you the realities of the FCA's position. They don't see loan sharking as an issue to stop them closing down lenders
"We found no evidence that consumers who have not been able to get HCSTC products
since the cap have generally had negative consequences as a result. The majority
(63%) of consumers turned down for HCSTC products since the cap was introduced
believe that they are better off as a result. We have not seen a significant ‘waterbed
effect’ with consumers increasing their use of other high cost credit products after
failing to get a HCSTC loan. We also found no evidence that consumers who have
been turned down for HCSTC are more likely to have subsequently used illegal money
lenders."
Amigo is considered a high cost credit firm by the FCA, and guarantor lending was covered in the high cost credit review. Personally I would consider them mid-cost. I don't believe credit unions will fill the gap, but in all of the FCA reviews, you'll consistently see that is the FCA's prefered solution. Based on the research they did after the clampdown on HCSTC (FS17/2), they don't see loan sharking as an issue. On the APR point, the FCA tends to be more focused on total cost of credit than APR, and they tend to act wherever TCoC is greater than 100%, be that credit cards with slow paydown rates, RTO, catalogues, overdrafts, long-term guarantor lending with top-ups, as well as the shorter term payday loans with high APR.
Exactly. They were the conditions for being allowed to lend again. As they Amigo have failed to meet them, the FCA are pretty unlikely to say, it's ok you don't really have to meet them. The FCA cares not one hoot about the survival of high cost credit firms (which by their definition includes Amigo), and have been perfectly willing to see mutliple others fail. The Woolard review, like previous reviews, (albeit naively) looks to promote alternatives to high cost credit, most notably credit unions.
Well it would be tearing up the key principles of 19:1 dilution, and additional £15m to the complaint pool. There's no benefit to the FCA to allowing that. How is it better than the fallback option for anyone except the shareholders?
Why would the FCA allow Amigo effectively to tear up the agreed SoA, and can start lending outside of the previous New Business Scheme.
"Have a look on glassdoor at interview reviews, they have been interviewing for all sorts of positions. So much more going on that whats being let out!"
There's one interview review in 2023, and that's for a collections agent, which is going to be one of the last roles left. Go on the Employer Review tab, and almost all of them list "company closing down" as a Con in Pros and Cons
~100m in the fallback scheme, there would have been another 15m if the new business scheme had gone ahead.
... but, but.. it had a bigger loan book....!
Judicial Review was a pipe dream. As long as FOS followed a clear process, and was able to give a reasonable argument as to why it made the decisions it did, (even if contradictory to other decisions), the JR would have failed.
"With the change of address do we know if the Previous HQ has been sold and if so how much was raised by it?"
It was leased, not owned.
The FCA doesn't buy the loan shark argument. There was a bunch of analysis done post-restrictions on payday lending, which found that loan sharks weren't really a factor, and people just borrowed less.
Why would reducing the dilution have increased the attractiveness to instututional investors? If anything it made it more attractive as they would have got to own more of the firm post investment.
Amigo haven't lent any money for 2 and half years, yet the world has carried on
Not sure how that's going to work. It's going to struggle to maintain a lending platform at that scale once the main office shuts down.
Says significant loan volumes only in Jan and Feb in the results (up to Dec) announcement.
""The current market cap is £10m, the Scheme creditors require £15m so the cost to acquire the company is £25m plus goodwill. Why would any new investor want to underwrite £45m when they probably feel they can take the whole company for this cost?"
Because they'd still need to chuck in £30m "working capital" to get the lending going. Plus the fact that the sort of businesses that underwrite shares are quite different from the ones that acquire them.
Gary wasn't voted off.