Tue, 09 Jun 2020 | BUSINESS SALE
UK subprime lender Amigo Loans has abandoned its plans for a sale after a potential bidder pulled out of the deal, with no other offers on the table. The company’s chairman Stephan Wilcke has also resigned, Amigo announced.
Bournemouth-based Amigo has said it has decided to cancel its final dividend for the year ending March 31, citing a material rise in complaints and costs associated with resolving them. It has reached a voluntary requirement with the UK Financial Conduct Authority (FCA) to work through and resolve its backlog of complaints by the end of June.
The company expects that clearing the backlog of complaints, which have principally been made in 2020, to cost at least £35 million, but said that it could be “materially higher”, due to a significant increase in customer complaints over recent weeks. The FCA said last week it was investigating Amigo’s creditworthiness assessment process.
Amigo announced in May that an unnamed buyer was interested in acquiring the company with an offer of 20.9 pence per share, or £100 million, compared to its current market capitalisation of £61.5 million. The deal was contingent on founder 61 per cent owner James Benamor approved the deal and ended his attempts to replace the board.
However, while Mr Benamor agreed not to pursue attempts to replace Amigo’s board, he has publicly stated that he would oppose the sale of the company. Shareholders were told by Amigo on Monday that the bidder was withdrawing from the process due to “the current market environment”.
Amigo provides “guarantor” loans to people with poor credit histories, providing they have a friend of family member willing to cover their repayments if they fall behind. Its share price and costs have been significantly impacted by complaints and regulatory scrutiny over recent months.
In its most recent accounts, to the year ending March 31 2019, Amigo reported revenue of £270.5 million, up from £210.6 million in 2018. Its total assets at the time were valued at £796.3 million, with total liabilities standing at £548.4 million.
Find businesses for sale here.
If you are looking for an exit, we can help!
This is a unique opportunity to acquire a mixed services law firm, specialising in family law and children protection with legal aid contracts, located in Middlesex.
This commercial litigation and property firm in Oxfordshire offers a prime opportunity for acquisition as the current partners seek retirement.
This thriving conveyance provider, positioned for further growth as the legal sector rebounds post-Covid, is now available for acquisition.
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.