The parent company of troubled lender Amigo Loans is set to explore possible acquisitions in order to generate value for shareholders, as part of a new agreement.
Bosses at the Bournemouth-based company have said securing new finance for Amigo Loans, which is in the process of being wound down, was now “effectively not possible”.
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Amigo halted all lending in March, with the firm having faced financial difficulties after being ordered to make compensation payments to former and current customers over historical complaints.
After it was unable to meet the terms of a High Court scheme, Amigo said it had been forced to use its "fallback option" and would wind down the business and use the money to pay off customers it owed.
In an update on Tuesday (October 17) Amigo Holdings said it had has entered into an exclusivity agreement with Craven House Capital until December, which could see it acquire some of its assets, including music streaming service ONE Bas.com and digital magazine platform Magazinos, in return for newly issued shares in Amigo and a cash subscription, expected to be at least £5m, for newly issued shares in the company.
Amigo’s board said at this early stage of the agreement, there was “no certainty” that the proposed transactions would take place. The company said it had requested temporary suspension of its listing and trading of its shares on the main market of the London Stock Exchange, pending further details on any proposed deal.
Chief executive Danny Malone said: "Over the past few months we have remained open to investment opportunities that would allow the business to restart, but have always said the likelihood of success to be very low. Unfortunately, that has been the case. The proposed transactions offer a solution that, if complete, would deliver some small value to shareholders which wouldn't be possible otherwise."
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As part of the arrangement to further advise on the proposed deals, the company has appointed Beaumont Cornish as sponsor to the company.
Amigo announced on May 16 that Mr Malone had resigned as a director and would leave the company after serving out his six months' notice period in November, but he has now been asked to continue in the role until the end of December to help with the negotiations of the proposed transaction.