REG - Amigo Holdings PLC - Update on the Schemes of Arrangement

Amigo ResourcesAnnouncement

07/03/2022 07:00

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RNS Number : 7791D  Amigo Holdings PLC  07 March 2022

7 March 2022

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

 Update on the Schemes of Arrangement

Amigo Holdings PLC (LSE: AMGO), a provider of guarantor loans in the UK,
provides an update on the reported position of the Financial Conduct Authority
("FCA") in relation to the Schemes of Arrangement pursuant to Part 26 of the
Companies Act 2006 proposed by ALL Scheme Ltd ("SchemeCo") (the "Schemes").

The following narrative is a direct extract from a letter issued after market
close on Friday 4 March 2022 to Amigo by the FCA. The contents of the FCA's
letter have been reproduced in this way to ensure the update to the market
accurately reflects the position of the FCA in regard to the Schemes. The
letter will be published in full on the FCA website.

The FCA's current position in relation to the Schemes

As you are aware, the FCA has been carrying out its assessment of the Schemes
and their compatibility with the FCA's rules, principles and objectives.

We note that SchemeCo has now finalised scheme documentation and supporting
evidence with a view to filing them with the court.  The FCA was provided
with your proposed finalised draft documents on 4 March 2022 and informed that
SchemeCo intended to file them on the same day.

The FCA's current position on the Schemes is that it does not presently intend
to appear by Counsel at the convening hearing and does not anticipate, at this
stage, that it will oppose the Schemes or have further direct engagement with
the court at the convening hearing.  The FCA, however, reserves its position
in respect of the Schemes and its right to intervene, both generally and/or if
facts and circumstances change.

The FCA nonetheless expects to be kept informed of all relevant matters
relating to the process of the Schemes, including the relevant details of any
court hearings should the FCA wish to observe (if not participate in) them.
We also expect to be kept apprised of any material and/or potential
developments in relation to the Schemes or their terms, any objections raised
by consumers, and any modifications or changes the Firm proposes to make as a
result.  In short, our expectation is that the development of the Schemes
remains an open and constructive process.

The FCA's position in relation to the Firm's proposed return to lending

The FCA's assessment of the Firm's ability to return to lending remains
ongoing, including its assessment as to whether the Firm is failing (or is
likely to fail) to satisfy the FCA's threshold conditions.  In our letter
dated 28 January 2022, we explained we do not expect the Firm to resume
lending until it has provided satisfactory evidence and demonstrated to the
FCA that its revised approach to lending is compliant with FCA rules and
principles and that the Firm is able to meet all of its broader regulatory
obligations.  That remains the FCA's position, with the onus on the firm to
demonstrate to the FCA that it is satisfying these conditions.

However, recognising the centrality of the Firm's proposed return to lending
to the development of the Schemes, the FCA has conducted an assessment of the
Firm's proposed return to lending based on the information provided by the
Firm to date.  The FCA has concluded, without prejudice to the ongoing
enforcement investigation, that the Firm could return to lending subject to
the following conditions being met:

(i)            the New Business Scheme being sanctioned by the
court;

(ii)           the FCA being satisfied that the Firm meets FCA
threshold conditions;

(iii)          outcomes testing of the Firm's new lending system
being completed to the satisfaction of the FCA; and

(iv)         dealing with, to the FCA's satisfaction, any other issues
that may arise.

If the conditions above are met, we expect the return to lending to have taken
place no later than 9 months after the New Business Scheme Effective Date, as
set out in the New Business Scheme terms shared with us on 4 March 2022.

As set out in our return to lending letter dated 28 January 2022, we would
expect any return to lending to be limited in volume and for the Firm to
demonstrate to the FCA (with third party assurance where appropriate) that it
was lending in a way that meets the FCA's expectations in respect of the
Firm's regulatory obligations before it sought to increase the volume of
lending, and would continue to meet those standards in the future.

With reference to our recent correspondence in January and February of this
year, which referred to the FCA's policy on imposing fines, we can confirm
that if, at completion of the enforcement investigation, we consider a
financial penalty is appropriate, we will take into account the priority of
scheme creditors to ensure any fine does not impact the amounts payable to
creditors under the Schemes.

We must stress that this decision is based on the information that FCA is
aware of at present.  The FCA continues to reserve its rights generally in
respect of the Firm's proposed return to lending, including to take action to
impose a requirement on the Firm's regulatory permissions which restricts it
from continuing its business.

The Company further confirms that, on 4 March 2022, it submitted the relevant
documents in support of the Schemes to the Court, in preparation for the Court
Convening meeting, which is scheduled to be held on 8 March 2022.

Gary Jennison, CEO of Amigo said: "We thank the FCA for providing this level
of clarity about its position on the proposed Schemes of Arrangement. There
still remain significant hurdles to overcome before Amigo can deal with its
insolvent balance sheet but this information will help us move forward to the
next stage in delivering the best outcome possible, given the circumstances,
for our customers, creditors and other stakeholders."

 

 

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
(mailto:Amigoloans@lansons.com)

Tom Baldock                      07860 101715

Ed Hooper                          07783 387713

 

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