Amigo handed small lifeline but continues with liquidation
The lender has signed a new ‘exclusivity agreement’ with shareholder Michael Flemming.
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Your support makes all the difference.Lender Amigo said it had been handed a small lifeline on Friday as it battles for a survival which is looking increasingly unlikely.
The company said it had signed a new “exclusivity agreement” with shareholder Michael Flemming.
It gives Mr Flemming the right to explore new options that could find new loans for the company, which could save it from collapse.
He will be able to potentially put together an 11th hour proposal for the business before September 6.
Amigo’s board said on Friday: “The board recognises the very low likelihood of a successful conclusion to any discussions arising because of this agreement but is pursuing the agreement in line with its duties.”
Amigo announced in March that it planned to liquidate its business after struggling to raise enough money to pay the compensation it owed to customers.
Shareholders should note that there remain significant impediments to any new capital being made available to the business
he business has been caught in serious problems over recent years after receiving a flood of complaints from customers.
It tried to reach a deal which would see it pay them some compensation, but continue to trade.
However after multiple attempts, the business could not raise enough money to pay customers what it had promised.
In March the company said it planned to liquidate and give the money it raises to those owed compensation. They will get around 17p in the pound, according to estimates.
On Friday, Amigo said: “The agreement will not stop the company or its subsidiaries progressing with the disposal of assets under its wind-down plan or acting on any approach governed by the Takeover Code.
“Shareholders should note that there remain significant impediments to any new capital being made available to the business.
“In addition, establishing a new business and potentially creating value for shareholders in the longer term has significant execution risks and will require regulatory approval.”
Shares in Amigo shot up by 120% following the news. However they had previously been at historically low levels.