Amigo Loans obtains High Court approval for creditors’ vote


AMIGO Loans says it is “on track” to survive and return to credit after a court cleared a crucial vote by creditors.

Bosses at the Bournemouth-based lender are seeking to save the business by capping the compensation it pays to customers who complain of past mis-selling.

A previous proposal was rejected by the High Court last year after the Financial Conduct Authority (FCA) opposed the scheme.

But the authority did not object to an improved offer that would pave the way for Amigo to start lending again.

The High Court has now given the green light to the company to convene an online meeting of customers who constitute the scheme’s creditors.

The vote could support Amigo’s new business plan, or the alternative of a liquidation plan that would close the company.

Amigo’s Chief Executive, Gary Jennison, said: “We are delighted that the court has accepted that the plans can conduct a creditor vote. The financial offer has been considerably improved and we will do everything possible to encourage the participation of creditors.

“As we have said many times, significant obstacles remain. Customers must first vote in favor of a program. We then ask the High Court to approve a scheme in May and, if it is the New Business Scheme, we have to satisfy the FCA with a number of conditions before we can go back to lending. A significant fundraising must then be carried out in the year following the court sanction hearing.

“Tough compromises and decisions were necessary to enable us to offer creditors the best possible outcome under the circumstances and for Amigo to have a future as a regulated lender in an important market segment. The road ahead is not easy, but we are on the right path and today’s court decision is another step forward.

The High Court has been told that Amigo Loans had liabilities estimated at £597million at the end of last year, exceeding its assets by £123million.

Lord Justice Snowden said in his judgment that the company was “insolvent on the balance sheet” and would “in the relatively near future be short of cash to pay all of its short-term debts”.

The court heard that people with claims could receive 41 pence per pound of their claims under Amigio’s new trading scheme, with final payment likely to come in November 2023. If the company was placed under administration they could receive 31 pence in the pound, with a final payment not expected until at least May 2024.

The company has completed approximately 927,000 guarantor loans since January 2005 and has contractual relationships with over one million customers, with approximately 81,000 loans outstanding.

The judge praised the company for explaining its proposals in “plain language” rather than the “complex and turgid documents that have often accompanied projects and plans in recent years”.


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