REG - Amigo Holdings PLC - Scheme of Arrangement and Equity issue update

Amigo HoldingsAnnouncement

24/01/2022 07:05

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220124:nRSX3040Za&default-theme=true

RNS Number : 3040Z  Amigo Holdings PLC  24 January 2022

 

24 January 2022

Amigo Holdings PLC ("Amigo" or the "Company")

Scheme of Arrangement and Equity issue update

Amigo Holdings PLC (LSE: AMGO), a leading provider of guarantor loans in
the UK, is updating the market on the proposed Schemes of Arrangement
("Schemes") in respect of the settlement
of complaints liabilities associated with historical lending by Amigo
Loans Ltd, a regulated subsidiary of the Company ("Redress Creditors").
Certain information about the Schemes has previously been announced on 6
December 2021 and 13 December 2021.

 

Amigo is seeking to secure the best result for Redress Creditors through the
Schemes that is possible in the circumstances. In doing so, the Company must
address specific concerns raised by the Court in relation to the previous
proposed Scheme.

 

In particular, the Court: (a) was not satisfied that there was no room for
further payments to Redress Creditors beyond those provided for by the
Scheme; and (b) considered it would normally expect to see equity holders
losing their economic interests where creditors were not being paid in
full.

 

As detailed in the 6 December 2021 update, the New Business
Scheme proposes an initial contribution of £97 million, to
be generated from internal resources. A significant proportion of this
initial contribution is derived from the run-down of the existing loan
book. In order to secure the best result for Redress Creditors possible in
the circumstances, the New Business Scheme will include provision
for an additional payment to Redress Creditors in the event that the
existing loan book generates a better return than currently anticipated.

 

As also stated in the update on 6 December 2021, the
Company intends to raise capital, within one year of sanction of the New
Business Scheme by the Court, to fund both the £15
million Scheme contribution and future lending. The equity
raise is likely to be undertaken by a rights issue for existing
shareholders, with a placing of unsubscribed shares to third party
investors. The rights issue will be subject to the approval of the Company's
shareholders after the New Business Scheme is sanctioned by the Court. If
shareholders do not approve the rights issue, the New Business Scheme will
revert into a wind down under which the shareholders will receive nothing in
respect of Amigo Loans Ltd.

 

The New Business Scheme will require the Company to issue at least 19
new shares for every existing share in the Company. This will leave
existing shareholders (unless they participate in the equity raise) with no
more than 5% of the Company's share capital, reflecting a UK market standard
level of economic interest for equity holders where creditors are not being
paid in full.

 

Amigo will have up to a year from the sanction of the New Business Scheme to
complete the new equity raise.

 

The Company believes that these provisions are necessary both to secure the
best result for Redress Creditors through the Schemes that is possible in the
circumstances and to address the specific reasons cited by the Court when
rejecting the scheme proposal. Without these additional measures,
the New Business Scheme is unlikely to be sanctioned.

 

The Company is continuing to keep under review and work with its
advisors on the Schemes and will keep the market updated when appropriate.

 

If the New Business Scheme is not sanctioned (or if the Company's
shareholders do not vote to approve the equity raise contemplated) Amigo
Loans Ltd will enter a wind down Scheme or insolvency. In such a scenario,
Redress Creditors will receive less than under the New Business Scheme, and
the Company's shareholders would receive nothing in respect of Amigo Loans
Ltd.

 

In these circumstances, the Company believes these provisions are in the
interests of the Company's shareholders as well as securing the best result
for Redress Creditors through the Schemes that is possible in the
circumstances.

 

Gary Jennison, CEO of Amigo, said: "The Board is fully committed to providing
the maximum amount of redress possible for qualifying creditors. Should
creditors vote for the New Business Scheme and the Court subsequently approve
it, these provisions provide additional protection for creditors and address
certain of the concerns raised by the Court above the previous scheme. They
are necessary for Amigo to survive and avoid insolvency."

 

 

 

ENDS

Additional Information

This announcement is not intended to, and does not, constitute or form part of
any offer, invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any securities, or the
solicitation of any vote or approval in any jurisdiction, pursuant to this
announcement or otherwise.

This announcement constitutes notice by Amigo Luxembourg S.A. (the "Issuer")
to the holders of the Issuer's 7.625% Senior Secured Notes due 2024 (for the
notes issued pursuant to Rule 144A of the United States Securities Act of
1933, ISIN: XS1533928468 and Common Code: 153392846; for the notes issued
pursuant to Regulation S of the United States Securities Act of 1933, ISIN:
XS1533928625 and Common Code: 153392862) (the "Notes") issued pursuant to
pursuant to Section 4.03(a)(3) of an indenture dated January 20, 2017 among,
inter alia, the Issuer, the guarantors named therein and U.S. Bank Trustees
Limited, as trustee and security agent.  Amigo Holdings PLC is the indirect
parent company of the Issuer. This announcement shall constitute a "Report" to
holders of the Notes.

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014. The person responsible for this
announcement is Roger Bennett, Company Secretary.

Contacts:

Amigo Holdings PLC       investors@amigo.me (mailto:investors@amigo.me)
 

Kate Patrick                        Head of Investor
Relations

Roger Bennett                  Company
Secretary

 

Media enquiries              Amigoloans@lansons.com

Tom Baldock                      07860 101715

Ed Hooper                          07783 387713

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  SOASEEEFDEESEDF