REG - Amigo Holdings PLC - Statement re Conclusion of Enforcement Action

Amigo HoldingsAnnouncement

14/02/2023 07:15

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RNS Number : 8443P  Amigo Holdings PLC  14 February 2023

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

   14 February 2023

Amigo Holdings PLC

 

Conclusion of Enforcement Action

Amigo Holdings PLC ("Amigo" or "the Company"), a provider of mid-cost credit
in the UK, welcomes the conclusion of the previously announced Financial
Conduct Authority ('FCA') Enforcement proceedings into the group's historic
lending practices and complaints' handling processes (the 'Legacy Issues').

Amigo's new Board and management have cooperated with the FCA's investigation
which has now concluded. The Company accepts the findings of the Enforcement
proceedings which are set out in detail within the FCA's Final Notice
published on its website.

 

Although Amigo is not required to pay a financial penalty, it accepts that if
it were not for its current financial position, the Company would have been
subject to a penalty of £72,900,000. In reaching agreement on the level of
the final penalty, the FCA recognised that any penalty would cause Amigo
serious financial hardship and would have threatened the Company's ability to
meet its commitments to redress creditors identified under Amigo's Scheme of
Arrangement, which was sanctioned by the High Court in May 2022 (the
"Scheme").

 

The final conclusion of the Enforcement proceedings represents an important
milestone for the Company in bringing the Legacy Issues to a close. In
reaching this milestone, the Company acknowledges the time and resource
allocated by the FCA to review the historic business and to identify previous
customer harm.

 

At a wider level the outcome from the investigations and the contents of the
Final Notice will, we believe, provide useful guidance to both Amigo and all
firms which provide credit to customers who are not readily able to access the
services of the mainstream credit providers.

 

Since the Enforcement Action commenced in 2020 the Board of the Company has
completely changed and the senior management team substantially refreshed by
the engagement of subject matter experts. This approach has allowed Amigo to
reflect on the past behaviours and to develop its new business proposition,
RewardRate, which fully incorporates the lessons learned. Since this
investigation began, Amigo's new Board and executive team have established
a strong business plan, improved approach to individual conduct and put in
place more robust lending controls in pursuit of compliant and better customer
outcomes.

 

Danny Malone, Chief Executive of Amigo, said: "I would like to apologise again
to any customers impacted for the past failings in lending practises that
occurred during the period 2018-2020.  As a new Board and management team, we
fully accept the lessons that needed to be learnt for the future and our focus
remains on rebuilding a business that delivers better outcomes for customers,
backed by stronger lending controls and a better culture.

"The FCA's decision in October 2022 to allow Amigo to return to lending on a
pilot basis reflects the significant change that has been undertaken in the
business, and we would like to thank the FCA for working constructively with
us. The conclusion of this investigation enables us to draw a line under these
historic lending issues as we seek to secure the capital required for the
future."

 

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.

ENDS

Enquiries

 Company
 Amigo Holdings PLC             investors@amigo.me
 Kate Patrick                   Investor Relations Director
 Roger Bennett                  Company Secretary

 Media enquiries                Amigoloans@lansons.com
 Tony Langham                   07979 692287
 Ed Hooper                      07783 387713

 Peel Hunt LLP                  020 7418 8900
 James Britton
 Oliver Jackson

About Amigo Loans

Amigo is a public limited company registered in England and Wales with
registered number 10024479. The Amigo Shares are listed on the Official List
of the London Stock Exchange. Since October 2022, Amigo has offered guarantor
loans and non-guarantor personal loans under its RewardRate brand. Both
products reward customers for on-time payments with an annual, interest-free,
payment holiday and the opportunity to reduce the effective APR, encouraging
better financial management and facilitating a long-term improvement of
customers' credit scores and financial mobility. Amigo has provided guarantor
loans in the UK from 2005, offering access to mid‐cost credit to those who
are unable to borrow from traditional lenders due to their credit histories.
The guarantor loan concept introduces a second individual to the lending
relationship, typically a family member or friend with a stronger credit
profile than the borrower. This individual acts as guarantor, undertaking to
make loan payments if the borrower does not. Amigo's back book of loans issued
pre-November 2020 is in the process of being run off with all net proceeds due
to creditors under a Court approved Scheme of Arrangement. Amigo Loans Ltd and
Amigo Management Services Ltd are authorised and regulated in the UK by the
Financial Conduct Authority.

Additional Information

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.

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