Beleaguered loans firm closes employee shares scheme

Troubled loans firm Amigo Holdings has announced it is closing down its employee shares scheme.

The Dorset based firm has failed to raise the necessary funds it needs to ensure its survival and is being wound down over the next 12 months.

Launched in 2005 the business specialised in subprime guarantor loans, which is where a borrower’s friends or family promises to pay back the loan if the borrower does not have the funds.

The company’s problems began when it was accused of mis-selling products to its customers.

According to a Financial Conduct Authority ruling published last month Amigo Loans “did not have appropriate processes in place to ensure it adequately assessed borrower and guarantor circumstances before approving a loan” between November 2018 and March 2020.

It has announced that all outstanding share awards in favour of directors and employees made under the Amigo Holdings Long Term Incentive Plan have been cancelled for nil consideration.

At the time of the cancellation, there were outstanding LTIP awards over 8,047,349 ordinary shares of 0.25 pence each in the Company.

The company’s share incentive plan has ceased to accept all new contributions made on behalf of participants.

In due course, following distribution of the assets retained in the incentive plan, the company will seek to wind up the initiative in line with the requirements of the HMRC.

Amigos is also closing its save as you earn scheme to all new contributions from participants and will return to participants their contributions.

In due course the company will seek to wind up the save as you earn scheme.