Amigo Holdings says its ability to continue as a business is questionable
By Anthony O. Goriainoff
Amigo Holdings PLC on Tuesday night signaled significant uncertainty that could cast significant doubt on its ability to continue operating, and said its pre-tax loss widened for fiscal 2021 after recording higher costs and losses. lower income.
The UK loan guarantor said the board was pursuing a scheme of arrangement to address concerns from the UK’s Financial Conduct Authority and High Court, and without it its balance sheet is insolvent.
“Amigo’s continuation as a business depends on our success in pursuing a program, our ability to raise capital in the future to support more new loans, and a satisfactory resolution of the investigation. of the FCA, ”the company said.
In May 2020, the FCA opened an investigation to determine whether the company’s credit rating process, as well as its governance and oversight, met its regulatory requirements.
In December, Amigo announced it would launch a plan of arrangement to address all claims relating to customer recourse issues resulting from unaffordable loans. The company said that while it would not allow full payment of all claims, its directors decided the plan was the best way to deal with claims for redress. In May, a UK court rejected the company’s proposed plan of arrangement.
“Amigo will seek to avoid an insolvent bankruptcy of the company by proposing a plan of arrangement, including the option of a managed liquidation of the company,” the company said.
The company said before a loan restart it needed to resolve the negative asset position on the balance sheet and show the FCA its viability and ability to meet regulatory obligations and threshold conditions. He added that he communicated constructively with the FCA and shared a number of options with them throughout the process.
For the fiscal year ended March 31, the pre-tax loss was £ 283.6million ($ 389.2million) compared to a pre-tax loss of £ 37.9million for fiscal 2020, said the society.
Turnover fell to £ 170.8million from £ 294.2million the previous year. The company said this was due to minimal new loans during the year, as well as a £ 27.2million change loss resulting from payment holidays linked to Covid-19.
Write to Anthony O. Goriainoff at [email protected]
Corrections and amplifications
This title was corrected on August 25, 2021 to reflect the fact that Amigo Holdings has said its ability to continue operating is in doubt, and not a growing concern.
Amigo Holdings said its ability to continue operating was in doubt. “Amigo Holdings says ability to continue as growing concern in doubt,” at 5:41 pm GMT Tuesday, incorrectly what Amigo said was questioned in the headline.