Member Info for Senator1

Between the interim report in Sept and end March 23 (last factsheet) SMT price is down 30.92%. In the same period the 20 largest listed stocks owned are up 10.49% using the weights of Sept 30th. They reprersent 52% of SMT. If the SP fall is correct this implies that the private cos valuation (48% of portfolio) is down 75.78%. Most of SMTs private investments are large companies and the investment is held as a Pref share which means they dont fall as much as ordinaries. Over the same period the Nasdaq was up 15.44%. The market has gone too far even taking account of the 50% valuation fall in Stripe. The fact SMT hold prefs in Stripe means their fall won't be as high. SMTs valuation mark down was 26% on Stripe from Sept to March. That is right given they are in Prefs and fact they I am sure had a valuation cushion from fact most of their inverstment was done in the G round of 2019 when the pre-money valuation was $35bn, not $95bn or even $50bn . The market has run ahead of itself too far on this name. JPM has a value of >$400bn, Stripe at $56bn looks good value to me at 6x the money raised.

Insolvency isnt the issue. It wont be let go but current shareholders can still loose 80-90% of their investment so thats a pointless exercise.

so what if its a year away, nothing will happen for 5-6 months and it still leaves the prospect of a £100M raise. Who in their right mind is going to drive the sp up with this coming for a co worth £38M and 2 FCA investigations ongoing. This is like a dingy becalmed in the Atlantic and will go nowhere, up down, up down going nowhere.

This sp will go nowhere but down as market is thinking its a £100M raise at minimum given what they said. Their ambition needs to be reigned in because you are right the current shareholder base cant provide that sort of funding so the result will be you will loose your shareholding if you cant follow your money. Given a current market cap of £38M and a £100M raise that would mean shareholders putting in 2.6x the value of their current holding to avoid dilution. So if you had £1m invested you would have to re-invest another £2.6m. This is clearly nonsense for existing retail shareholders and hence the importance of the message to management to scale back their ambition with the first funding. Its so onerous to existing shareholders its a joke. Its like the joke on Amigo is insolvent. Amigo looks insolvent because they have hit reserves with a £344M claims provision to leave a net -£117M equity. Out of this £344m they said the numbers include an expectation of using £270m in cash. In SOA1 they offered £15M upfront and some further odds and sods. No wonder they were kicked up the backside and told to go and get serious. They were taking the **** and got exposed as chancers or incompetent I dont know which. I think incompetent as GJ seems like a straight shooter but financially he is way out of his depth. Now its time for shareholders to give them a reality check and threaten them with litigation if they go ahead at £100M

They said they will raise £300M (debt and equity). We know they have £100m debt already available(the unused downsized securitisation facility. So I am assuming new debt of £100M and new equity £100M. They were asked how much the equity raise would be but declined to answer but this is a fair guestimat and it makes sense. A lending book with a 49% APR , the new business will be lower, lets say 30% but in any event that can support a 2:1 debt equity ratio.

Not a hope in hell. At your numbers would imply an Amigo valuation of £404m to £566M after Rights Issue assuming they raise £100M. Not a hope in hell. If you don't want to be wiped out, the best strategy is for Amigo to raise money incrementally rather than in one go at depressed prices. They should only raise £50m equity to start and live with that plus the £100M unused securitisation facility. That gives them £150M lending power. At 49% APR generates gross profit of £73M, opex £26M leaves operating profit of £47M-£50M plus say a one third amortisation of the £150M gives new lending year 2 of circa another £100M and on it goes. Raising £100M now is stupid and means you will end up with 27% of company if the RI price is 8p. If its 5p you own 19% from 100% now. If they curtail RI in first instance to 350M you own 43% at 8p and 32% at 5p. If they told the market this was the strategy this alone would lift the share price and the calcs above would be even better. They are total morons raising £100M upfront.

They didn't need to. The £100M unused securitisation is in accounts and a 2:1 split is a very reasonable estimate based on a book generating minimum 30% APR gross.

In the accounts mgmt have assumed £270M of the claims provision will be made in cash, p.15 of the accounts. If they end up paying cash of say £75M (5x higher than the original £15M in SOA1), what happens to the £195M? It was taken from reserves on basis Amigo would need to pay £270M in cash but ended up paying say £75M. The £190M should be written back to the P&L, that's, 41p a share. I cant wait for the bull...t this mgmt will come up with to justify this doesnt happen if they settle on £75M cash. So sp should go to 41p if the cash component is £75M, 36p if its £100M etc and that's before you give new business and remaining existing book any value. For now it will stay at a discount until we know the cash component and the outcome of votes. We should have been told the cash part today but instead got a rubbish answer.

As a shareholder I want to remind you of your responsibilities to existing shareholders. I am assuming a 1:2 equity : debt split. Why raise £100M at these depressed prices from a largely retail investor base that will only have one result, the shareholding will go to larger vulture funds.

You have £100M unused limit on the securitisation. Raise £50M in the first instance and prove the concept on the new business and get the share price higher. This gives you £150M firepower for new lending and clears the negative revenue reserves. The operating cashflow from a £150M new lending book even at a 30% APR is substantial and in itself funds new lending.

The last 6 months operating cashflow has averaged £19M a month. I don’t know what it has been since Sept but I’m guessing say £15m a month, that’s £90M by March, lets call it £75M. You offered £15M last time in cash, I don’t know what you are offering this time but if its £50M, that’s 3.3x higher. At £75M that’s 5x higher. As you note, the claimants will still get a balance reduction where it is warranted (current borrowers) and I am assuming a reasonable part of the £75M will go to past borrowers as you can’t offer a balance reduction here. However, it must be more difficult for a borrower to argue they couldn’t afford the debt when they ended up repaying it. I know there will be exceptions here, particularly where it was repaid by the Guarantor.

As you have assumed £270M cash liability in the accounts, what happens to the difference of say £195M (£270M-assumed £75M cash contribution). Is this written back to the P&L or some part of it. This also clears the negative revenue reserves.

You need to scale back your ambition as this is not the way to treat existing shareholders. Raising £100M equity at these levels makes no sense whatsoever and as far as I am concerned will open you up to a claim for negligence from existing retail shareholders. Its is grossly incompetent and negligent in my opinion as is going from £15M cash to £75M but that is another issue, but again an incompetent one.

Forget a premium raise that's total rubbish. The big boys are taking on retail, they dont need to offer a premium and they wont. There is way too much uncertainty even if approved by Court. It will be the classic structure, discounted price.

The shareholder base of this Group is largely retail, if you don't give the clear message to this mgmt team to scale back their ambition you will lose your shareholding to the vulture institutions that will come in and underwrite the larger transaction. They should be told in no uncertain terms that it is NOT necessary to raise £100M at these depressed levels. There is no need for that, the £50M equity, the £100M securitisation facility and the material operating cashflow from lending even at a 30% APR is more than enough to scale in to the new business lending. Existing shareholders need to be clear on this or you will lose your shareholding to the bigger vultures who will descend on this and rip it away. This mgmt team are maybe nice people but not financially astute. They need to be told in no uncertain terms. Scale back their ambition with your money.

This Mgmt team are as stupid as the last lot. They should confine equity raise in first instance to £50M and with the £100M unused limit on the securitisation gives them new lending firepower of £150M. The monthly positive operating cashflow in last 6 months is average £19M a month. For next 6 months say this is £12M, thats £72M total. They offered £15M cash last time, they gave bull..t reasons why they can go higher this time, lets say £50M, thats 3x higher, give claimants the whole £70M odd thats 4.6x higher. [Again demonstrates their incompetence]. This materially reduces the dilution and they use the £150M to prove concept and get share price higher. That is the sensible way to go rather than their vague bull...t. The £50M also clears the negative revenue reserves. These guys have no idea what they are doing. They dont need to raise £300M straight away. Live within your means and prove yourself, amateurs

Also no one is capable of convincing anyone that Amigo will be profitable without the details on Amigo 2 which cant be proposed until Amigo 1 is sorted so thats a pointless avenue to go down.

I never used the term "last man standing" nor was that something I implied, that term was used by someone else who gets confused over and over again. In my extreme(for the reason I already explained) example I had one "qualifying" beneficiary because they were adjudicated as deserving an award by whoever does this. This would be the definition of "class" of beneficiary. Amigo wont qualify for obvious reasons but lets say a way could be found to recover surpluses that is still problematic as there will be problems with returning this to the shareholders who funded this share award as the share register is dynamic. It also exposes Amigo management to share price risk on deficits. A share, that's value fluctuates is not the way to pay defined liabilities. Also the FCA made an argument the claimants were unsophisticated and didn't understand what they were voting on and now all of a sudden they are capable of valuing the Amigo share price and capable of accepting that in return for a defined benefit. FCA cant have it both ways.

So if there is a deficit can the Trust ask for more shares or cash or will it be one sided only. Just putting $15M into shares results in 150M, £30M, 300M shares. Where do you think the sp will go over the next 3 years if the market knows that this scale of shares might come to market at some point. Years of uncertainty and a terrible technical position for the shares which will affect the market cap and Amigo's ability to raise future funding, debt and equity.
If there is no intention to give renumeration greater than the adjudicated claim then shares are not the right instrument as their payoff is unknown.

To demonstrate the stupidity of this idea consider the extremes. Lets say the £15M upfront cash was used to buy 150M new shares at 10p issued to the Trust day one. Lets say in 3 years time the sp is up 3x and we are through the adjudication process (I want to use extremes to demonstrate the stupidity of this idea) one party is successful with a claim amount of £50K. He is now the only beneficiary of the trust and walks away with shares worth £45M. Do some of the people on here think the existing shareholder base is totally stupid. The claimants will be owed what they are owed as determined by whoever (FOS, courts, I don't know who), they should get that amount and not a penny more, in a mixture of cash and loan adjustments. Getting unlimited upside is moronic and unless someone has a direct line to God and can say what the numbers of successful claimants will be and the average award this idea first mentioned by the FCA barrister is totally unpractical and idiotic. Put something together that pays claimants what they are owed, that's it. They are not owed unlimited upside. If they want that they can buy the shares with their compensation. Totally stupid idea, shares to a trust.

Because it was all so incompetent and really hard to understand why, a small part of me thinks that Dicker didn't really try to win. He will recognise the FCA don't like this sector and that he was taking on the establishment and didn't really want to win as in the long run it wont do him any good. It is that or he was out of his depth I don't know which, but whatever the reason nobody came out of this well.

i can read the accounts and know exactly what was taken from shareholders. I don't know why these points weren't made, the numbers speak for themselves if you know what they mean.

I believe the FCA will be sued if this collapses. Given their role they should be accountable tor a high standard of professionalism, clarity, conciseness and at a very minimum understanding the minute details of the situation and not putting themselves in highly conflicted situations. To me they didnt show any ofthis. They will pay a price for that.

Im afraid, Maverick, I don't agree with writing to Treasury to complain about the FCA. That won't achieve anything and I dont have confidence in the Board either and so I wrote telling them what they should do now. No negotiation with FCA on SOA2 and just tweak the four years to unlimited and will leave it to them whether they offer interest on payments after year 4. I dont support new equity now, unsecured claim for equity swap, none of that. If the FCA don't accept that, call their bluff