This content is not available in your region

UK lender Amigo's shares tumble as future in limbo

By Reuters

By Iain Withers

LONDON (Reuters) -Shares in troubled guarantor lender Amigo fell as much as 50% after a temporary suspension of share trading was lifted on Friday, with the company still waiting on a court decision on a rescue plan for the ailing firm.

Amigo applied to the High Court for permission to cap compensation payments to customers, saying a deluge of mis-selling claims threatened the firm with collapse.

Amigo temporarily suspended trading in its shares on Wednesday pending the court outcome, but applied for trading to resume on Friday after the court said it could take a few days to reach a judgment.

Amigo shares were down 26% at 0742 GMT.

The plan was opposed by the Financial Conduct Authority for short-changing customers, with the watchdog objecting at the High Court hearing on Wednesday after reversing its earlier stance of staying on the sidelines.

Amigo’s plan had also drawn criticism from politicians and consumer groups.

Its shares had tripled in value over the year to date from 8 pence to 24 pence prior to the trading suspension, as investor confidence built that a rescue plan would be approved.

They have plummeted from a peak of over 300 pence shortly after the company floated in June 2018, after regulatory concerns and boardroom tussles torpedoed the stock.

Around 95% of votes cast by current and former Amigo customers ahead of the court hearing were in favour of the proposal.

Amigo had previously argued the plan was necessary to avoid the company’s insolvency.

(Reporting by Iain Withers, Editing by Dhara Ranasinghe and Elaine Hardcastle)