UK lender Amigo says faces insolvency, won't appeal court ruling

By Reuters

<div> <p><span class="caps">LONDON</span> – Amigo Holdings Plc said on Tuesday it was looking at filing for insolvency after a court last week rejected a rescue plan for the subprime lender.</p> <p>London’s High Court rejected the plan, which would have cut compensation payouts to customers for mis-selling loans, sending the company’s shares plunging more than 50%. </p> <p>In a statement, Amigo said it would not appeal the ruling. It anticipates delaying its financial results for the year ended March, it added. </p> <p>“Without a scheme, Amigo faces insolvency as it will be unable to satisfy its customer compensation claims as well as meeting the legally binding funding obligations owed to its secured creditors,” said <span class="caps">CEO</span> Gary Jennison.</p> <p>Subprime lenders in Britain have been hit by a regulatory clampdown in recent years that has led to a wave of claims, and in some cases compensation payouts, for mis-selling loans. The effect of the <span class="caps">COVID</span>-19 pandemic has added to the strain.</p> <p>Amigo – which has 137,000 current customers and has lent to 500,000 people since 2005 – had applied to the High Court for permission to cap payouts, saying a surge in claims threatened it with collapse. </p> <p/> </div>