Member Info for Senator1

The gross loan book was £502m at 31/12, £400 or so net. No way is it at £200M now. The 15% has nothing to do with "senior reserve build up". There is a huge problem if the 15% goes to 50%, huge!

Thats true but remember the securitisation lenders only granted the waiver on basis that all cash on their pool reduces their senior notes and nothing goes to sub holder which is Amigo. No such option exists on the £234M secured bond as there is no partial repayment option and hence the cash build up. They will be getting organised to try and improve the floating charge on the cash and if they do that Amigo is existing only to repay them. That is why Insolvency was and is a valid option that needed to be presented to creditors. Where mgmt went wrong is they tried to push it too far with the 15% for 4 and employed a very weak individual to make their case in Court.

Make 15% infinite is the only simple way and is in line with what they proposed so Board can save some face. If FCA disagree with that then it is clear they want this sector killed and out of business. The biggest problem is that while GJ might be a nice guy and folksy he is way out of his depth. They presented two options and the only tangible back up they gave was a very basic cashflow schedule that a first year business student could prepare. Dicker was woefully inadequate as well and only thing he said was that it wasn't for the court to design the best option and he was shot down on that in a matter of seconds. If the Board believed Amigo can survive by giving away 15% for 4 years then they can until all claims are settled. They stroke they tried to pull was idiotic and they now look like fools. The secured holders will have taken notice for sure and if I was them and got an opportunity I would put it in administration with my own accountants running things.

they cant sell equity either because of the security structures

The FCA doesnt even allow Amigo to pay a dividend they have zero chance of getting approval for share buybacks. All this stuff about buying shares is total rubbish. FCA wont allow it and Secured lenders wont either until they are repaid in full

A lawyer going to negotiate the number of shares for an aggregate claim size that has not been established and will take years. Totally idiotic and impractical. I would not agree to such a shambolic idea. Its the type of thing designed by a lawyer not a business person. A sledge hammer to crack a nut. In my world layers document commercial terms agreed by business people and wrap it up so it is legally enforcable. Day you put a lawyer negotiating you get the shambles we all recently witnessed. Impractical, over the top and plain stupid.

You have no idea what you are talkng about. Shares issued that don't trade to claims that have not been established. Rubbish, rubbish, rubbish. What you fail to understand is that giving up a share of profits when claims are established has an economic consequence for the claimants that is similar to a debt for equity swap IF the debt claim was established. It is better for shareholders as claim is there until the obligation is met. The Amigo Board has shown itself to be of limited capabilities. Simplicity is the key to a solution. Di..king about with people like you proposing half baked ideas that have legal difficulties when there is a very simple solution is daft. You should propose yourself for the Amigo Board, you would be in good company.

They absolutely did not say that in Court. The FCA suggested an unsecured established claim is swapped for equity. He called it a debt/equity swap. The problem being the valid claims have not been established yet so hence the trust. In this example there is consideration i.e the unsecured ESTABLISHED claim for shares. Amigo issuing new shares for zero is totally stupid idea as there is no consideration and current shares will fall to 0.5p or near zero. The % of profits is much simpler and works much better. You clearly do not understand what the FCA counsel proposed.

as I said, 15% of profits till all valid claims lodged before the cut off are paid. Has the other big benefit for Amigo as puts subtle pressure on FCA to find an Amigo 2 that works for them because if Amigo not running 15% of nothing is nothing.

This doesn't work. Any new cash coming in to Amigo goes to the benefit of the secured holders. They would love someone to put money in to add to their security pool. Nobody in their right mind would do that and also no new institution will walk in to this nightmare without an approved Amigo 2 which they cant do until this situation fixed and on solid foundations. Someone else mentioned a future RI, that doesnt work either for same reason but more fundamentally because today's shareholders cannot commit unknown future shareholders to a funding. The world would be a great place if we could all commit someone else to a funding! Total rubbish.

They should just tweek what they proposed and get on with it. How can FCA object if all valid claims get to share 15% of profits for however long it takes. It will take years to agree the claims anyway and what I really like is the CMCs will hate this idea as they will foot the bill now but may have to wait years for their success fee. Again this will help to ensure only valid claims are funded. The future RI commitment stuff is all rubbish as it is not based on knowledge of what a RI is and how they work.

In short, no

Amigo cant buy shares, the cash they have belongs to the secured lenders and no way will they allow their cash to be used to buy shares. There is £165m of cash at Dec, FCA estimate £180m now. They need to get to £234M by Jan 024 and it grows at £15M per Q historically so will just make it. Exactly as the cash chart Amigo showed to Court. What some people fail to understand is the Board cant spend that cash in a way that will leave the secured holders short or they will have a negligence suit on their hands. In fact if I was a secured lender I would be working now on legal ways to tighten by floating charge on the cash to a fixed charge and then it goes nowhere. If the temporary waiver not extended that might give me the legal basis I need. The only easy option Amigo has is to make the 15% of profits available until all claims settled and give the unsecured holders the option to take payouts in cash or shares at that time. For shareholders 85% of something is better than 100% of nothing. Forget upfront cash solutions over and above the already proposed £15M, none of these work.

secured lenders wont agree or allow options 1-3 and 4 is stupid because you are just adding to cash pile for secured lenders. None of those work

15% is fine if it exists until all claims met and ensures viability for Amigo which has to be in everyone's interest. Too big and they wont get future financing plus time value of money calculation is meaningless with rates where they are.

I dont think the secured lenders will allow more than £15-20M upfront as the cashflow schedule presented to Court already shows the sterling Bond repayment in Jan 2024 is very tight. What they could easily do is extend the 15% of future profits to say eight years. Everyone is then aligned to Amigo having a long term future. The unsecured claim for equity swap doesn't work as it will be years before these claims are settled plus this doesn't in itself add any cash and they will only be diluted away to nothing anyway as they wont have the cash to hold their % shareholding. They could make it indefinite on the 15% or until all claims are settled whichever is sooner. Easy solution, how can FCA combat that one?

The Secured Bondholders will not negotiate at all or contribute a cent and there is nothing the Court or FCA can do to make them come to the table. The Amigo presentation shows as a going concern they will get their money back. If they have to appoint an administrator this might lose 10-15% of the principal but given they get 7.625% interest it will be a tiny loss in worst case. I wouldn't even answer a call from Amigo if I was a Secured lender. Someone else mentioned a Rights, that's also stupid as the cash raised is then charged to the bondholders when held as cash or new loans.

There is no liquidity in the Bond so the price quoted is based off dealer runs and so means nothing a point I would also make about the equity valuation justification by the court. Amigo's liquidity is totally rubbish and so anyone suggesting there is any signalling input is total rubbish. The signalling input can only apply to shares that trade in the tens of millions each and every day and it certainly does not apply to Amigo. A lawyer talking finance with no practical knowledge.

Lady & Gentlemen,

Paragraph 97 makes very clear that the Court was not persuaded that the alternative to this scheme was Insolvency. Therefore as a shareholder I want to know the following;

? On June 25th , if the securitisation lenders do not approve the temporary waiver, what precisely happens? What amount of the £180M cash can they claim, if any. What amount of loans secures this facility and what is the current balance of the securitisation facility?
? Does the sterling Secured Bond have any linkage to the securitisation facility going in to run-off which would allow the Bond investors to organise an acceleration event if they so voted. The “Financial Summary” you presented to the Court makes no mention of any such possibilities. As these are not Amigo decisions to make can you explain why this was not even highlighted as a possibility.
? If the cash from the securitisation facility goes 100% to the securitisation facility in run off is there enough cash to meet the overhead base of Amigo to allow it to get to January 2024 as the chart suggests?
? I fail to understand how a temporary waiver on one third of the debt financing was not even mentioned at the sanction hearing or in the cashflow forecast. If you know the securitisation lenders will again roll the temporary waiver why has this not been communicated?

I am really concerned about this glaring omission of factual content to the Court. I don’t understand how the FCA are able to claim that secured bondholder cash be used to continue this process. If I was a secured bondholder I would be tightening my grip on the floating charge on the cash and restricting it’s utilisation in any way that my documentation allowed.

The FCA suggesting the Secured bondholders should be asked to contribute is totally ridiculous and shows me they do not understand the financing structure but what is even more concerning is that the Amigo brief did not understand it either.

I would appreciate a reply to all shareholders, you owe them that at the very minimum.

The Court only has to decide whether the two options presented were fair and not misleading and that those voting were capable of assessing the options. That's it, you don't negotiate with the High Court, that's not their job or experience. They will approve or decline. If it is declined the current Board will either pursue Insolvency or they all have to resign. Either way it is chaos. Personally, I think it a very easy decision and Judge has to approve. The idea that he can second guess a Board approved by the FCA is farcical. He said himself that while he recognised it is not the courts job to design the best solution but they do have the right to check that the two options presented are right. I think they are, certainly Insolvency needs to be there. Could it be 20%, 25%? If you are going to say that you need to be able to say that with giving away that % Amigo can still raise new money. Current Board have clearly said no. The FCA clearly don't know as they haven't even shown the Court the respect of understanding the current finances never mind new financing. What was really sad was Mr Dicker didnt either and saddest of all wasn't briefed properly. I would have ensured he referenced the temporary waiver on circa £100m of financing over and over again. FCA are in a very dangerous place in my opinion. Another aspect shows their absolute ill thought out arguments. They argue that there was no reason a menu of options couldn't be presented to creditors (they think there is an abundance of cash and time remember) and then on the other hand they question whether the creditors were equipped to assess the two options presented because Amigo believed simplicity and clarity was important. If this is what you get from "senior" involvement at the FCA, they have a lot more problems than just this case. I couldn't make this stuff up!! Scary.