Member Info for Senator1

That's true but i didnt expect Amigo to not have thoroughly explained their view and the real uncertainties that exist. I thought what they proposed;
1.) Unlimited Loan Adjustments for valid claimants
2.) 15m cash upfront, and
3.) 15% of pre tax accounting profit (not cash profit), reasonably fair . The biggest contribution already booked being the £150m claims provision which can be used for the balance reductions. Not even acknowledged. How could they forget about this. The only answer I can come up with is Dicker has no financial knowledge at all.

I was negative when 95% plus posters wanted JB back with a totally mad plan to fight the FCA AND expand abroad. If JB was back this would definitely be over, 100%. I liked the new CEO as the number one rule is you cant win fighting your regulator. The CEOs folksy style and continual message of wanting to liaise with the FCA was right. BUT if the CEO is nice guy then the CFO needs to be ruthless. Most of the stuff I go on about he should have been on top off and he should have made sure their brief knew it inside out

please bear in mind they are only estimates, as we just don't have enough data to be more precise which as a shareholder really pis..s me off. As far as I'm concerned management work ultimately for shareholders and I just don't trust the capabilities of this lot and I include the hired help, lawyers and RBC. Since when did RBC become a player in the advisory business!

No they don't need to wipe out shareholders but as a going concern with no new lending you need to account for the current £60m approx of annual operating expenses and if it took say 3 years to unwind you can see this eats in to your estimated £200M surplus and so yet again we are back to near zero for unsecured and shareholders for a different reason

Everything. If there is new lending then Amigo has survived and reached a SOA and so you are not talking about my distressed estimate based on buying the book with all the uncertainty around the £150m claim liability. In short it affects what I take off my estimated £300M NBV and the return I want

^31/12

This is why Amigo was right to point to the risk of insolvency and why they could only afford £15m upfront in cash BUT they did a dreadful job explaining this. I dont know whether the lawyers had any financial knowledge at all but my understanding is that the onus of proof was on Amigo and Judge in his statement kept saying there was no evidence to support the insolvency risk but with the data from 31/12 and some minor assumptions I think it was possible to show this as a real risk, not to be waived away as not worthy of debate, not even a single sentence!

If the business can continue and start lending again, yes. If not, no and I have tried to objectively show that in my last post .

My conservative estimate would be to take the £376m fully current gross loans at 31/21/. Assume the £30m a month collections is likely coming from this portfolio so that reduces this to £200 approx and add half a years accrued interest at 49.99% brings this back up to £300m. I think the balance of 126m (502-376) is provided to £90m so has a net value of circa £30M, so my estimate £300-330m as the current net book value or £300M on the current book. However the total book has an estimated claim liability on it of £150M. If I was buying the book I would be worried about exactly quantifying this which I think near impossible and so I would want a really high return to take this risk. So £300m NBV take off £150m(estimate) and I would want 100% return on my money so maybe £75M, more realistic £50m. This is why it is so important that the best deal is Amigo keeps running and EVERYONE realises there is no value for unsecured claims or shareholders unless this happens. My estimated £50M plus the £180m cash gets the secured out but that's it.

Anybody who says they could do that and wanted to charge you is lying. The latest information anyone has is 31/12/20 and we are now in June and so it is impossible. Totally impossible. Even if you assume £30M of collections a month you don't know which category of loan the collections are on and then you have the problem of factoring in the secritised loans where we know all cashflow goes to those lenders until the senior debt paid and we don't know what amount of loans collateralises this facility. Its just not possible to do a current market valuation without a cashflow data file on each loan to the sum of the current gross loans outstanding. Keep your money, it would be a total waste of time

There is NO STAGE 4 under IFRS, stage 3 is the delinquent category. They put everything past 61 days in same bucket at 44M and tell you stage 3 is 39 so a little bit of maths gives you an estimate of the 61-90 days. No, definitely not Prime books, 100%. I traded US stocks in 2008 and a lot of people thought the financial system was going to collapse and everyone was scrambling for liquidity but there were no such sales. There is absolutely no way Metro sold a prime book at those discounts. The gross margin on prime mortgages is 1-1.25% and this only works because they are 20% weighted for capital purposes. A bank selling a prime book at such discounts would have to re-build a similar size portfolio and wait 20 years just to recover that level of loss. Thats ridiculous.

The impairment provision is 18% as at 31/12 (90/502). Write off are taken against prov account it is NOT a write-off/provision account, it is just a prov account. Its not going up 15% per Q that is total rubbish. With little new lending I dont expect this to be a material factor.
Prime mortgages are not sold at 20-25% discounts. Prime books are securitised not sold as they are so capital efficient for banks. Only impaired books are sold and they are sold because they are capital inefficient to hold. You write this stuff with such authority but it is plain to me you dont really understand what you are writing. To someone who understands fin accounts and the markets in general it is very obvious, you should not be writing this stuff, its plain wrong

^where

There is zero chance of Amigo selling anything at a premium, I think net book value would be an achievement, hell of an achievement

You have management estimate of £150M which is a good working figure and this is why the stupid 10% to claimants came from

Thats what interest on late payment compensates for. If they dont have the cash at a particular point in time then they dont have it. Remember they made the 15% commitment on accounting profit that is not the same as cash profit, big difference due to accrual accounting.

The FACT that should have been made is avoiding Insolvency is not Amigo's decision to make when they are on temporary waivers. Its not the FCAs job or the HC either to say what a secured lender will or will not decide to do. This aspect was glossed over like it didn't exist. Dicker should have been tied, I agree, to a tree somewhere and should never have been anywhere near the Court

when you are negotiating with the village idiots anything can happen. The saga is riddled with incompetence from the HC down to Amigo management

The resizing of the loan was without any limits I would add. I know it doesnt help those from the past but thats where cash and profit contribution come in

This 10p in the £ argument used in Court was also a load of crap and showed me how incompetent Dicker was. The 10p was on the basis of the £15m upfront cash and gave no recognition of the 4 years of 15% of profits and much more importantly Amigo's commitment to resize the balance of the loan if that was an appropriate remedy. They have already taken a £150m provision for this type of exercise. but because Dicker knew Dicks..t about the accounts he didnt even refute the totally ridiculous calculation by the FCA and the judge knew less. The SOA1 deal was much more than 10p in the £ but the incompetence of the Amigo side was staggering. A scandal. I don't trust any of them, all incompetent fools running around like headless chickens