Amigo payday lender’s creditors support survival plan
Amigo, the struggling subprime lender, said its creditors had backed a legal scheme and a new stock issue that would allow it to move on.
Amigo stalled after complaints exploded about its lending practices. He has now requested a stay of his actions while the legal process is completed.
The company said its creditors had voted for a plan which it hopes can give them 42p for every pound owed to them.
The proposal was supported by nearly 89% of customers who voted and beat out a second proposal which would have liquidated the company with a lower payment to customers.
“Our customers voted in favor of the new business program, which the Amigo Board of Directors believes provides the maximum possible recourse to creditors,” Chief Executive Gary Jennison said.
“This is an important step in settling liabilities arising from historical lending practices under previous management.
“However, the new trade regime has yet to be sanctioned by the court.”
The case will go to court on May 23 and 24.
The company’s future has been in limbo for two years after receiving so many compensation claims it simply couldn’t pay them all.
A year ago, aggrieved customers voted in favor of another deal, which would have given them just 10p for every pound they were owed. But this was rejected by the High Court, which said it was not fair.
Amigo also has an Irish operation and started lending here in February 2019, targeting people with “bad credit”, who had been turned down by traditional lenders. It offered loans of up to €5,000 at an annual rate of 49.9%.
However, it stopped all new loans pending its restructuring. – Sound system