Amigo Holdings PLC on Friday said it has not received sufficient investment interest to cover its equity capital requirement of £45 million.
The Bournemouth, England-based consumer credit provider said that it remains open to proposals, but that it believes that it is unlikely to reach the target by May 26, to allow the continuation of the business under its preferred solution.
In May 2022, the UK High Court sanctioned Amigo’s scheme of arrangement, which contained a preferred solution that is conditional on the completion of a capital raise by May 26, followed by the contribution of a minimum £15 million payment to the scheme for creditor redress.
If the capital raise is not completed or the board determines it cannot be by May 26, then the scheme will revert to an ‘orderly wind-down’ of the business.
So far, Amigo said it has received sufficient proposals to cover its debt requirements, as well as indications of interest to fund £21 million, made up of £11 million in ordinary share capital and £10 million in exchangeable notes.
Amigo noted that it is considering a modification to its business plan to reduce working capital requirements by £3 million, and ‘whether a potential new scheme, to eliminate the £15 million capital commitment to scheme creditors, is likely to succeed’.
These reductions, the company said, could reduce the equity capital requirement of the raise to £27 million from £45 million, leaving the company £6 million short based on current indicative interest.
Chief Executive Officer Danny Malone said: ‘As we assess the viability of a new scheme, our minds remain focused on a go forward solution for the Company where existing shareholders retain some value but where scheme creditors can benefit beyond the fallback solution.
‘This is a very challenging situation and the board may conclude that another new scheme is not feasible, but we believe it is important to explore fully and swiftly before reaching a conclusion.’
Amigo shares were down 2.7% to 2.14 pence each in London on Friday morning. The stock is down 67% over the past year.
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