REG - Amigo Holdings PLC - Update on Capital Raise and Scheme of Arrangement

Amigo HoldingsAnnouncement

10/03/2023 07:45

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230310:nRSJ5620Sa&default-theme=true

RNS Number : 5620S  Amigo Holdings PLC  10 March 2023

10 March 2023

Amigo Holdings PLC

 

Update on Capital Raise and Scheme of Arrangement

Amigo Holdings PLC ("Amigo" or "the Company"), a provider of mid-cost credit
in the UK,

announced a Scheme of Arrangement, sanctioned by the High Court in May 2022,
which contains a Preferred Solution which is conditional on the completion of
a 19:1 capital raise by 26 May 2023, followed by the contribution of a minimum
£15m payment to the Scheme fund for creditor redress.

 

Unfortunately, following extensive engagement with a large base of potential
investors since commencing a marketing process in October 2022, ongoing
conversations with potential equity investors over providing the full publicly
stated equity capital requirement of £45m concluded on Wednesday evening, and
the Company has not received sufficient aggregate indications of interest to
cover the total amount.

 

Whilst the Board continues to remain open to proposals, it believes that this
target is unlikely to be achieved by 26 May 2023 to allow the continuation of
the business under the terms of the Preferred Solution.

 

To date, Amigo has received:

·    indicative proposals sufficient to finance its debt requirements; and

·    indications of interest in equity capital subscriptions to fund
£21m, comprising £11m in ordinary share capital and £10m in exchangeable
notes.

 

In the light of the indications of interest received and investor feedback,
Amigo is exploring:

·    modifying its business plan to reduce working capital requirements by
up to £3m; and

·    whether a potential new scheme, to eliminate the £15m capital
commitment to Scheme creditors, is likely to succeed.

 

The working capital requirement reduction, taken together with the effect of a
new scheme, if sanctioned, could reduce the overall equity
capital requirement from the anticipated Capital Raise from the
current £45m to approximately £27m, leaving a shortfall on current
indicative interest of £6m, which would need to be provided by existing
shareholders and other as yet unidentified investors. Any new scheme would not
impact the £97m committed to the Scheme, which will remain available for
Scheme creditors to share pro rata to their adjudicated claims. The proposed
timetable of payments to creditors would also remain the same.

 

Danny Malone, CEO of Amigo said: "The Board is very conscious of its duties to
its shareholders and

wider stakeholders, including Scheme creditors. 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."

 

Any new scheme would require approval by the High Court and by creditors, in
the same way as the current Scheme.  There is no certainty that a new scheme
would be approved by creditors and the Court, or that this route will be
pursued by the Board once the prospects of achieving a scheme have been
further examined. The Board is then bound to immediately switch to the
Fallback Solution under the current Scheme which comprises an orderly
wind-down of the business, if the Board expects the Capital Raise cannot be
completed successfully by 26 May 2023. We are currently engaged with the FCA.

 

A further announcement will be made as soon as practicable.

 

Unless the context otherwise requires, capitalised terms in this announcement
shall have the meanings ascribed to them on the announcement by the Company
dated 23 February 2023.

 

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

 Peel Hunt LLP                     020 7418 8900
 James Britton
 Oliver Jackson

 Ashcombe Advisers LLP             020 7529 5800
 Andreas Wesemann
 Josh Black

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. Amigo offers mid-cost personal loans under its
RewardRate brand. The RewardRate 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 offers access to mid‐cost credit to those who were unable to
borrow from traditional lenders due to their credit histories. 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 the 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 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 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  UPDFZGMFNGFGFZG