Amigo loans announced Monday that its Independent Clients Committee (ICC) had confirmed its preference for the company’s ‘new business’ plan of arrangement, which would see the company take over new loans and make an initial cash contribution of Â£ 97million sterling to its creditors.
The company said the committee shares its view that the new trading program will provide creditors with higher returns than the liquidation program.
He said he would ask creditors to vote on both options, and if both options are approved, then submit them to court for sanction.
The court would be urged to consider the new business plan for sanction before considering the liquidation plan due to the ICC and its own preference.
Although details of a capital increase to partially fund a return to new loans have not been finalized, Amigo said a Â£ 15million contribution to the program after the initial contribution is expected to be funded through a capital increase and new capital commitments of between Â£ 120million and Â£ 300million, of which he hoped to raise at least Â£ 70million in new equity.
“We are delighted that the independent client committee has confirmed its preference for our new business plan and that we can now take a further step towards achieving a way forward for Amigo’s creditors and other stakeholders,” said the Managing Director Gary Jennison.
âWe have listened intently to his views for several months, while responding to concerns raised by the High Court and the regulator last May, and I would like to thank its members for the considerable time and commitment they have shown. by helping us seek a fair result for all creditors.
“We modeled our first program proposal based on the forecast of a severe impact of Covid-19 on our business.”
Jennison said Amigo’s business performance in terms of collections and write-downs has been better than expected throughout 2021, as the size of the loan portfolio has been reduced by about half with an additional 12 months of collections.
âTherefore, although the company remains insolvent, Amigo is in a position where it can pay a considerably higher sum to these creditors due to a remedy if we are able to obtain their support, the approval of the court, then to carry out a capital increase.
âThis is a complex process which, given our financial situation, does not offer a perfect path for existing creditors or shareholders, but today we are taking an important step towards resolving historic lending issues. that we are facing. “