Amigo Loans’ creditors approve both schemes

88.8% of its creditors voted in favour of its new business scheme, with the company receiving 145,532 votes in favour and 18,401 voting against it. The scheme proposes an initial contribution of £97m to be generated from internal resources - with a significant proportion being derived from the run-down of the existing loan book. 

It also includes a provision for an additional payment to redress creditors in the event the existing loan book generates a better return than currently anticipated. Additionally, it intends to raise capital - within one year of any potential sanctioning of the new business scheme by the court - to fund both the £15m scheme contribution and future lending. 

This new scheme would require the company to issue at least 19 new shares for every existing share of the business. This would leave existing shareholders with no more than five percent of its share capital - reflecting a UK market standard level of economic interest for equity holders where creditors are not being paid in full. 

Last month, regulator the Financial Conduct Authority (FCA) said it did not intend to formally oppose this scheme - which is seen as the preferred option by the firm. It explained this scheme represented an improvement on last year’s failed proposal. 

It has, however, said it reserves the right to intervene - including engaging in the court process or to take regulatory action against Amigo at any point, if the FCA considers that facts or circumstances have sufficiently changed. 

In its latest meeting, Amigo Loans’ creditors also approved its wind-down scheme - with 83.1% voting in favour of this. If implemented, this would see a managed wind-down of the business under a scheme framework. 

Commenting on the vote, Amigo Loans’ chief executive Gary Jennison said: "Our customers have voted in favour of the new business scheme, which the Board of Amigo believes offers the maximum possible redress to creditors. This is an important step to address the liabilities that arose from historic lending practices under previous management.

"However, the New business scheme still needs to be sanctioned by the court, and a significantly dilutive equity issue is needed to fund the Scheme and to recapitalise the ongoing business given the requirements of the Schemes for the transfer of virtually all existing assets to the redress creditors.” 

The schemes will now be put before a court hearing, with this being listed to be held on 23 and 24 May. The company will first ask the court to sanction the new business scheme, with the company putting forward the wind down if the court does not sanction the new business scheme.