Amigo open to reverse takeover as losses mount

Berto
December 18, 2023

Embattled subprime lender Amigo Holdings (LSE: AMGO) said Monday it remains open to a reverse takeover, despite reporting an 82% plunge in half-year revenue to £2.8 million as the company winds down its lending business.

Shares in Amigo rose 33% on the news, although they have sunk 95% over the past 12 months.

In a trading update, the London-based company said it believes a reverse takeover “is the only possible prospect of delivering any future value for shareholders.” Amigo said that while it has received several tentative proposals, none have resulted in an executable deal so far.

The troubled lender saw pretax losses narrow to £6.7 million in the six months to September 30, from £12.7 million last year. Operating expenses fell 12% to £23.8 million.

Amigo is currently overseen by the UK’s Financial Conduct Authority as part of a court-approved scheme of arrangement to pay redress to customers mis-sold loans. The company does not plan to pay dividends going forward.

With CEO Danny Malone set to depart on December 31st, CFO Kerry Penfold will take on CEO duties as well.

“We remain open to assessing other viable options that could be beneficial for our shareholders, our people and wider stakeholders,” said Malone. “A reverse takeover is the only possible prospect of delivering any future value for shareholders.”