Member Info for Senator1

The temporary waiver is a FACT, see RNS from Amigo. I am pretty sure the securitisation lenders havent made a decision yet because if they had Amigo is obliged to release an RNS as this is important. The fact the securitisation is a third of the debt means it is MATERIAL. How it impacts the sterling Bond is a bit uncertain but I know from experience that secured lenders do not allow themselves to be in inferior positions to other secured lenders and so if one is going for the exit, the others like to have the option to go if they so decide and not have to hang around for years while others leave with their money. BUT without the Bond Indenture I cant be sure.

No they wont reply. What can they say? I did it to make sure someone from Amigo side explains to the Judge why Insolvency is a realistic scenario and one the Board HAD to present to creditors. That is half the battle to getting this Judge on side. He just wants FACTS and the temporary waiver is just that

He may be highly qualified I know nothing about him but to be representing Amigo and not even mention once the temporary waiver was ridiculous. That is important as it shows the Court that one creditor or a group of them are NOT confident enough to waive the breach indefinitely. This means that one group are reserving their position on going for the exit. This is EXACTLY the kind of objective proof on potential insolvency that he asked for and the FCA brief contended had not been submitted to the court. I'm judging him on yesterday alone and it might be that he wasn't told about the temporary waiver but his clerks should have gone through all the financing documents, there are only 2 after all, its not a big job when you have the documents and you know what you are doing.

Relatively speaking he a simple couple of decisions to make.
1.) Are the options presented a FAIR representation of what is available, NOT the best but FAIR. I think given the nature of the financing he has to conclude yes if he gets all the facts presented to him.
2.) Did the creditors understand what they were voting on. Hard to argue that 70K odd had no idea what they were doing including FOS. I think he has to accept that they did. They certainly seem to understand the reality better than the FCA, maybe they need some advise.
3.) Can the Board spend another £15-20M on thrashing out another unspecified deal using cash that the secured creditors own. Definitely Not on this one.
4.) what is the implication of the temporary covenant waiver for urgency and Amigo's viability if they decide enough is enough.

I think he has no real choice but to approve. He will hate fact he has no real choice but that's where he is. The FCA changed their mind because more senior people took control of the case. The day to day case handlers can rub in their faces that the senior lack of understanding of the detail of this case means their brief was so mis-informed that his suggestion on lack of urgency & loads of cash for other proposals was in two words TOTALLY STUPID. The FCA briefing made him look like a mis-informed fool. That will hurt, I am sure.

You have to recognise that the cash Amigo has agreed to put in upfront is charged to Secured Creditors. When they say the max they can put in is £15m they know exactly what they can take out of the secured pool. The Board also has a responsibility to protect ALL stakeholders including the Secured Creditors. They cant just take money out of their pool in a way that leaves them short, the Secured Creditors wont allow it. its impossible for me, you, the FCA or anyone else to know what they can put in to the pool upfront in cash. We don't have the data and nor does anyone and that includes the HC & the Judge at the moment because they weren't focused on the right stuff. Most of the benefit to unsecured will come from balance write-downs and future profit participation. This is how it should be because if it is put in Insolvency they get nothing not even the £15m. We have to trust the Board that they have weighed this up carefully and can now explain to the court why the FCA is clearly wrong and they are right. The FCA is clearly wrong as they think they can use the £180M which has a floating charge in favour of secured creditors any way they like. This is not correct, as the BoD have a responsibility to ensure this is not diminished to a level that the £234m SECURED bond cannot be repaid in Jan 2024 and remember some of that estimated £180m cash belongs to the securitisation lenders who have a big decision to make on 25th of June.

On reflection, let’s assume there is nothing in the Sterling Bond other than an obligation to pay coupons when due and Principal in 2024. If there was anything else or DOUBT over anything else it would be easy to “support” the potential Insolvency view.

But lets go on the basis there is nothing and lets work on the possibility that the securitisation waiver is not continued. At this late date, I think that is a “Fair” assumption. The securitisation will formally go in run which is just over a third of the debt financing as at 3Q. The cliff edge of Jan 24 remains on £234m and they will be a rather disgruntled participant going forward and I am pretty sure won’t agree to any negotiation that lessens their position, why should they? This really is death by a “thousand cuts” for Amigo and so I believe the Board are right in suggesting Insolvency as the only other viable option as they can’t really sanction stumbling on to a slow death. The court wanted proof on this Insolvency position and the Amigo counsel needed to pull the pieces together to show why this was highly probable. The information was all there, and instead he focused on fact that it is not the Courts role to design the best solution.

The argument that 70k odd creditors including the FOS are incapable of independent analysis is also rather arrogant of the FCA, the percentages in favour are hard to overlook, particularly in the context of the complaints numbers where it is 90% plus.

The fact the FCA approve the Board, think they have the requisite skills to act on behalf of ALL stakeholders and then essentially tell them their binary view is wrong because there is loads of time and loads of secured bond holders cash which can be used to keep negotiating and put things in trusts! This was a ridiculous argument and should have been destroyed by Mr Dicker. It wasn’t.

Overall, the fact that the temporary waiver on a third of the debt financing wasn’t even mentioned, not once, is very hard to understand particularly as there were many things asserted that were just factually incorrect.

The analysis of the market value and shareholder loss was very skewed to picking time periods to support their view and comparing it to the FTSE 100!! The 10% shareholder contribution ignored the balance transfers and the contingent profit payment. The lack of urgency was wrong, the contention that the estimated £180m cash could be used to fund more negotiation between unsecured, FCA and shareholders, also wrong. But none of this was corrected with the firmness and clarity required.

I don’t know if you get a further opportunity but these points are important. The Judge clearly doesn’t like the “Sword of Damocles” hanging over him. He needs to get over this and should not be trying to optimise the outcome without all the facts presented to him in a clear and concise way. This idea that £15-20-30M of secured creditors cash is used for something that adds nothing to their position is prepos

I only know him on yesterdays performance so maybe it was just a bad day at the office or maybe he wasn't briefed accurately enough. I dont know the reason

We know for a fact the securitisation has a temporary waiver to the 25th June, thats in the RNS on Amigo website and has been verified by others. If not waived again it goes in to run down which means all cash goes to those creditors until they are fully repaid. What we don't know because I cant get a copy of the 7.625% Bond Indenture, is what happens to this Bond. Is there any possibility that it too can accelerate. These Bond holders wont be happy hanging around till 2024 with a declining business and the current circus with the FCA. But even if they cant accelerate how does Amigo survive when a £100m odd of securitisation is in run down, there is a cliff edge Bond repayment in 2024!! Its death by a thousand cuts, thats why the Board are right that Insolvency is the only real other option. Mr Dicker or whatever he is called missed this point as tangible evidence of the Board position on Insolvency. I consider it gross negligence and I think he was in way over his head but the Amigo team also should have spoon fed him this analysis.

If the info was in the bundle as you assert why would he question the Insolvency recommendation and in particular why didn't he correct the FCA when they asserted there was no urgency. He gave a good impression he wasn't aware of the temporary waiver. It wasn't mentioned once. Given its importance I think he missed this point. The Amigo council should have made sure he was aware of it and made everyone aware of the importance of these secured holders and that the cash essentially belongs to them and should not be used to settle things between equity and unsecured creditors. They sat by once but I am sure their patience isn't unlimited. The FCA position that they wont get their hands dirty but will opine at the end yes or no and then might change their mind as many times as they like. The secured holders are professionals and know you cant work with someone acting like that, its impossible.

The other bizarre position is the FCA have to approve the Board of Directors. So they approve all the members and when they make a recommendation on the options with all the inside information they have, the FCA say (essentially) we don't believe you, there are other options and the current plan is unfair. If you dont understand the financing issues and what the secured lenders might and might not do, how can you disagree so publicly with the people you approve as qualified to do a professional job. The FCA are ridiculous but they won the argument today because Amigo was so weak.

I think it does because it supports the Board in presenting a Binary position and provides proof of the potential Insolvency risk. There was a lot of conjecture on other options with more negotiation or time. If you believed the FCA there was no rush as there was loads of time and cash to fund exploring other options. This just isn't factually correct and puts the details on the Scheme in context and its Fairness. It doesn't have to be the best but just reasonable in the context of the real situation of Amigo which you cant opine on if you dont understand how it is currently financed and the problems that exist.

also Mark dont forget to expose what happens to the sterling Bond if the waiver not rolled again. If they have the potential to accelerate or in simple terms ask for their money back earlier than 2024 then the Board advising insolvency as an alternative was 100% right particularly as I believe the secured lenders wont sanction another £15-20-30m bill on a re-negotiation. You might be able to argue that even if the securitisation goes in to run down it doesnt necessarily mean insolvency (you might have a chance on this) but you have no hope if the Secured Bond goes a similar route. The Stg Bond is the killer punch!

No, they cant do anything before 25th as already agreed to waive to that date. It is also why there is urgency unlike what the FCA presented.

You all need to press tomorrow as this lot will be reluctant to expose themselves if my estimate is right. As a Board they are liable to me for gross incompetence and negligence. You need to hit them hard on why June 25th temporary waiver wasn't mentioned at all and what are implications for the Bond. I know what happens on the Securitisation Facility as they have given that information in the past. The more that make a big deal about this the better and tell them if you are right you think it very negligent.

I know but the equity swap could be with anyone but if I had to guess I would say Bybrook. When you buy a stock it is so easy to put it on equity swap, nowdays its all automatic, just tick a box.

Nobody told him about June 25th!!!

I dont think the FCA lawyer was good, he demonstrated to me he didnt understand how Amigo was financed but I agree the Amigo guy was worse and he had less of an understanding but he should have been briefed better by Amigo. I find this level of incompetence very frustrating.

My advice, all shareholders should press Amigo on this point tomorrow because if they omitted to make this point I think they and their lawyers have some serious questions to answer. All they had to do was demonstrate to the court in a tangible way why Insolvency is a real option. The fact they are in default on a major financing is all they needed to say, over and over and over again. Then this would be a no brainer as the argument that 70,000 people are thick is arrogant in the extreme. Not an argument I would want to endorse as a judge

There is no way JPM are a shareholder. Their confirmation tells you they are on equity swap which means they have bought the shares but have swapped their equity exposure for Libor so in reality JP just providing finance. That and avoidance of stamp is purpose of equity swap. Again lawyer for Amigo had no idea how market works plus he should have been all over the stupid argument of the value of Amigo is £140M. The trading volumes of Amigo are so poor, just retail playing pass the parcel, that it says nothing about valuation and merely reflects speculation. Silence from the lawyer for amigo as he has no market understanding.

I am pretty sure on the acceleration of the SF. How it is linked to the Secured Bond is the real killer question. IF and its an IF at the moment, but if its confirmed, the judge has no real other choice to agree as the Board's advice now has TANGIBLE EVIDENCE of their binary position and I think any reasonable person will agree that the Secured lenders wont allow the Board to spend their cash on something they don't gain from. It has to be checked and the lawyer charging a couple of grand an hour has to make the point. I have asked Amigo to confirm, that is first step. If I am right the judge will just have to accept the sword of Damocles position, he clearly hates