Amigo unveils £40m capital raise
By Abigail Townsend
Date: Wednesday 28 Sep 2022
(Sharecast News) - Amigo Holdings outlined plans to raise £40m on Wednesday, as the embattled firm looked to resume lending.
The guarantor lender was hit with a barrage of customer complaints over alleged mis-selling before being forced to halt new lending during the pandemic. Following a lengthy investigation, it agreed a rescue plan with the Financial Conduct Authority earlier this year, which was then sanctioned by the high court in May.
Under the settlement scheme, Amigo must make an initial contribution of £97m, which will be used to settle customer claims, and on Wednesday said it expected to meet the contribution, based on current projections.
It also proposed a £40m capital raise, to be completed by May 2023, as part of the scheme, and said it would raise debt "to support future growth".
As part of the settlement scheme, Amigo is required to return to lending by 26 February 2023. The FCA has yet to green light Amigo's return, but in a statement at the annual general meeting, the firm said: "Following a long period of review and discussion, we are finalising details with regards our proposals to commence a lending pilot.
"As well as designing the new product set, we have invested in new technology and undergone a cultural reset. Amigo now has the right values and operational processes in place, and we are confident the mistakes of the past will not be repeated."
As at 1130 BST, shares in Amigo were ahead 9% at 4.13p.
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