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There’s more drama over at subprime lender Amigo, which this morning reported a 83% drop in profits to £3m in the three months to June, compared to £18m a year earlier.
The guarantor lender said it was hit by a pause on new lending – except to key workers – during the pandemic, and the granting of payment holidays to around 47,000 of its 199,000 customers.
Amigo is the UK’s largest provider of controversial guarantor loans, which allows friends and family to guarantee repayments on loans to people who might otherwise struggle to borrow. The company repeated warnings over its ability to continue as a going concern – basically a big question mark over its future operations – due to the impact of Covid, a potential increase in complaints, and the possible outcome of a regulatory investigation into the way Amigo has assessed the creditworthiness of its customers.
Despite the gloomy report, Amigo’s shares rose as much as 30% on Friday morning after its estranged billionaire founder James Benamor took to Twitter to launch his takeover call as part of a lengthy and bitter battle with Amigo’s current leadership.
Benamor – a self-confessed former petty criminal who has flip-flopped in and out of leadership roles at Amigo – said he was calling for a shareholder vote that would replace Amigo’s chief financial officer Nayan Kisnadwala within 30 days, remove non-executive director Roger Lovering, install board members approved by Benamor, and appoint the founder as chief executive of Amigo Loans Group.
He has also committed to buying up 29% of Amigo’s shares – if he is successfully appointed chief executive, that is – at a price of 20p per share. That could be an attractive proposition for investors who have seen shares tumble 66% since March to just 13.5p. The saga continues.