Amigo grants exclusivity agreement to shareholder
By Abigail Townsend
Date: Friday 09 Jun 2023
(Sharecast News) - Amigo Holdings has granted a shareholder an exclusivity agreement to pursue financing options for the troubled business, the mid-cost lender confirmed on Friday.
Amigo said that under the agreement, financier Michael Fleming would explore finding and completing a debt investment in the firm or its subsidiaries.
Amigo, which cannot borrow from any other source until the agreement expires on 6 September, said the move did not alter wind-down plans, first announced in March.
It also noted there was a "very low likelihood of a successful conclusion to any discussions arising because of this agreement".
That did not stop Amigo's shares soaring, however, and by 0930 BST the under-pressure stock had rallied 131% to 0.7p.
Amigo started an orderly solvent wind-down of the business after it failed to raise essential funds.
Originally a subprime guarantor lender, following claims of mis-selling and a difficult pandemic, it refocused on mid-cost loans to people typically excluded from mainstream finance.
It also agreed a rescue plan with the Financial Conduct Authority, following lengthy discussions about its future, under which it agreed to pay compensation to creditors and resume lending by February 2023.
But the deal was conditional on a capital raise and Amigo was unable to garner enough interest from potential investors, forcing it to start winding down the business.
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