REG - Amigo Holdings PLC - Scheme of Arrangement Update

Amigo ResourcesAnnouncement

13/12/2021 07:00

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RNS Number : 3582V  Amigo Holdings PLC  13 December 2021

13 December 2021

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

Scheme of Arrangement Update

Amigo Holdings PLC (LSE: AMGO), a leading provider of guarantor loans in the
UK, is updating on its proposed Schemes of Arrangement ("Schemes").

 

ALL Scheme Ltd ("SchemeCo"), the wholly owned subsidiary incorporated for the
purpose of SchemeCo applying for a Scheme of Arrangement under Part 26 of the
Companies Act 2006, is today issuing the Practice Statement Letter ("PSL") to
current and former customers (both borrowers and guarantors) of Amigo Loans
Ltd and to the Financial Ombudsman Service ("FOS") ("Redress Creditors"). The
PSL will provide information to the FOS and to customers who believe they may
have potential redress claims in relation to historic loans made by Amigo
Loans Ltd before 21 December 2020.  The PSL is issued pursuant to Practice
Statement (Companies: Schemes of Arrangement under Part 26 and Part 26A of the
Companies Act 2006), and explains two proposed Scheme options, the terms of
which reflect those outlined in the announcement by Amigo Holdings PLC on 6
December 2021 regarding the agreement reached with the Independent Customers'
Committee ("ICC"). The letter can be found
at www.amigoscheme.co.uk/practice-statement-letter
(http://www.amigoscheme.co.uk/practice-statement-letter) .

 

The two Schemes being proposed by the SchemeCo are a 'New Business Scheme',
which is contingent on new lending restarting and Amigo completing a
successful equity raise, and a 'Wind-Down Scheme', which involves the managed
wind-down of the Amigo Loans Ltd business under a Scheme framework.  As
previously announced, the SchemeCo intends to ask Redress Creditors to vote on
both Scheme options. If both options are approved by the Redress Creditors,
SchemeCo will then submit both options to the Court for sanction. The Court
will be asked to consider the New Business Scheme first, as the preferred
option of both the Board and the ICC, before it considers the Wind-Down
Scheme. If the Court does not sanction the New Business Scheme, the Court will
be asked to sanction the Wind- Down Scheme as a fall-back solution. The Court
convening hearing for the Scheme is listed for 16 February 2022.

 

The Board and the ICC are both of the view that the New Business Scheme will
provide a better outcome for Redress Creditors than the Wind-Down Scheme.
Details of the estimated pence in the pound  of redress that will be provided
to Redress Creditors is included in the PSL; the New Business Scheme is
estimated to provide 42 pence in the pound compared with the Wind-Down Scheme
which is estimated to provide 29 pence in the pound.

 

Amigo Holdings PLC's shareholders and the other creditors of Amigo are not
party to the Schemes. There is therefore no action for any such persons to
take. The effect of this is that the Company will not be seeking prior
authority from shareholders to proceed with either Scheme although the New
Business Scheme will require consent of shareholders to the proposed equity
raise. The Board is pleased that this is the next step towards finding a fair
resolution for all stakeholders which it believes either Scheme can achieve.
If neither of the New Business Scheme or the Wind-Down Scheme is approved by
the creditors or neither is sanctioned by the Court, Amigo Loans Ltd will
enter into an insolvency process.

 

Gary Jennison, CEO of Amigo, said:

"We are pleased to be writing to customers with a new Scheme proposal to meet
redress claims relating to historic loans. In shaping the proposal, we have
listened closely to the views of the Independent Customers' Committee.

 "The ICC has agreed the terms of the offer, which provides a choice between
a New Business Scheme and a Wind-Down Scheme. The New Business Scheme, which
is contingent on a successful capital raise, offers Redress Creditors a
significant improvement on the terms offered under the first Scheme and it is
the preferred choice of both the ICC and the Board of Amigo.

 "Shaping a new Scheme has been a long process and I'm grateful to all
stakeholders for their patience. We recognise that significant hurdles remain,
but today's letter is a vital next step towards dealing with our historic
complaints liability and finding a fairer resolution to righting wrongs of the
past. We hope a successful new Scheme will also allow a changed Amigo, under a
new management team, the opportunity to bring forward a new, regulated lending
proposition for a segment of the market where options are diminishing and
demand remains high."

 

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.

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

 

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