Amigo struggling to raise cash

In a statement put out by the business this morning (16 January) it said it has secured term sheets for debt facilities which it believes are capable of execution following further discussions with lenders, however it has been unable to secure a commitment from a cornerstone investor to underwrite the whole of the capital raise.  

The firm does say multiple investors have expressed possible interest in making a minority investment, with it therefore assessing whether there’s sufficient interest for a syndicate of such investors to be formed in order to support a £45m capital raise.  

It began looking to raise equity and debt following Financial Conduct Authority approval to return to lending in October 2022 through its New Business Scheme of Arrangement. 

This return is still conditional of the completion of a capital raise. If this is not achieved by 26 May 2023, Amigo will go into run-off and will be wound down.  

Responding to Amigo’s most recent statement, its chief executive Danny Malone said: “The Board and senior executives have worked continuously over the last few months to secure the future of the business and our focus remains on finding a solution that is in the best interests of all our stakeholders.  

“It is disappointing that we have so far been unable to identify the requisite equity backers for the business. However, we are continuing with our efforts to put together an equity investor consortium as expeditiously as possible.  

“We realise that the economic backdrop since we announced the scheme has changed substantially. This has made the process of raising equity capital to support the scheme conditions significantly more challenging than expected.  

“Given the potential interest for minority investments, we will strive for a positive outcome over the coming days as we are committed to delivering a better outcome for creditors, colleagues, and shareholders as well as customers who deserve access to attractive, mid-cost credit products. I would like to thank all our employees and our partners for their efforts to date.” 

Later today the business will be hosting calls with both its shareholders and bondholders.