UK’s Amigo says CFO Mike Corcoran to step down

  • Stocks drop 42% and close at a record high
  • Subprime lender warns of potential insolvency
  • CEO stresses urgent need for business bailout

Jan 24 (Reuters) – British subprime lender Amigo Holdings (AMGO.L) said on Monday chief financial officer Mike Corcoran would step down immediately, on a day its shares fell 62% after the company reported potential insolvency.

Amigo earlier today said it could enter insolvency if a new corporate bailout and possible rights issue were not approved by creditors and in court, and shares on the Stock Exchange London closed 42% lower at a record high of 3,480 pence. Read more

Amigo has struggled to survive after a deluge of customer complaints early last year about badly sold loans. The High Court in London in May 2021 had also rejected the company’s initial business bailout for short-term compensation claimants.

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The new 97 million pound ($131.18 million) bailout proposed in December would likely involve a rights issue of at least 19 new shares for every existing share, diluting the stakes for existing investors, Amigo said. Read more

“While it is positive that progress on Amigo’s plan of arrangement and new business plans is progressing, the statement also clearly outlines the extent of potential dilution for existing shareholders,” Ronan Dunphy said. , banking analyst at Goodbody.

“If creditors vote for the New Business Scheme and the court subsequently approves it, these provisions provide additional protection to creditors and address some of the concerns raised by the court over the previous scheme,” the statement said. Amigo’s chief executive, Gary Jennison, in a statement.

“They are necessary for Amigo to survive and avoid insolvency.”

($1 = 0.7394 pounds)

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Reporting by Sinchita Mitra and Aby Jose Koilparambil in Bengaluru and Iain Withers in London; Editing by Subhranshu Sahu and Ramakrishnan M. and Marguerita Choy

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