Beleaguered loan company announces deal to save part of business
Beleaguered loan company Amigo Holdings has announced a potential deal that could lead to shareholders receiving some of their investment back.
The Bournemouth loans business is in the process of winding down its business following a year of uncertainty.
The company specialised in providing finance to customers who would struggle to obtain credit elsewhere. It was hit by a series of complaints from customers and investigations from regulators.
This morning Amigo announced it has entered into an exclusivity agreement with Craven House Capital and others.
The deal would see Amigo acquire the early stage businesses of music streaming service ONE Bas.com; worldwide digital magazine platform Magazinos; film streaming service TV Zinos, and payments provider Payzinos in return for newly issued shares in Amigo and a cash subscription, expected to be at least £5m.
The company said negotiations are at an early stage and there can be no certainty that the deal will take place.
It remains subject to formal terms being agreed and completion of due diligence and receipt of regulatory approvals. This announcement is being made to allow discussions to progress.
At the request of the company the FCA has suspended the company’s listing and trading on the Main Market of the London Stock Exchange has been suspended,
If the deal goes ahead existing shareholders in Amigo would be significantly diluted. The costs of any future transaction would be paid by the proposed new investors even in the event that the proposed transaction does not complete.
As after an extensive search for new finance for Amigo’s lending business, the directors concluded that securing such new finance is effectively not possible.
The proposed deal would potentially deliver some longer term value to existing shareholders.
The wind down of Amigo’s historic lending business continue to their existing timetable.
Danny Malone, chief executive of Amigo, said: “Over the past few months we have remained open to investment opportunities that would allow the business to restart, but have always said the likelihood of success to be very low. Unfortunately, that has been the case. The proposed transactions offer a solution that, if complete, would deliver some small value to shareholders which wouldn’t be possible otherwise.”
As part of the Amigo has appointed Beaumont Cornish Limited as Sponsor to the Company.
The company announced in that Danny Malone had resigned as a director and would leave the company, after serving out his six months’ notice period in November.
Following the announcement the board has asked Danny to continue in the role as chief executive until December to help with negotiations.
