Regulatory Update Regarding Scheme of Arrangement
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
24 March 2021
Amigo Holdings PLC ('Amigo' or the 'Company')
Regulatory Update Regarding Scheme of Arrangement
Amigo Holdings PLC (LSE: AMGO), a leading provider of guarantor loans in the UK, provides an update on the Scheme of Arrangement (the 'Scheme') following a notification by the Financial Conduct Authority (the 'FCA').
As announced on 25 January 2021 and updated within our financial results on 25 February 2021, Amigo and ALL Scheme Ltd ('SchemeCo') have been in discussions with the FCA as the terms of the Scheme have been finalised and to respond to the issues and concerns raised by the regulator.
The FCA notified Amigo and SchemeCo after market close on 23 March 2021 that, having completed its assessment of the terms of the Scheme, while the FCA does not support the Scheme, it is not currently proposing to take any additional regulatory action that might stop the Scheme were it to be agreed by the Scheme creditors and sanctioned by the Court, but the FCA reserves the right to change its position. This is based on information currently made available to the FCA, including the skilled persons report, relating to the Scheme, which is in the process of finalisation. The Scheme creditors are Amigo's 700,000 past customers, 300,000 present customers and the Financial Ombudsman Service (the 'FOS').
The FCA considers that the Scheme may not be compatible with the FCA's rules, principles and strategic objectives. In particular, the FCA has identified certain concerns with the Scheme which it has drawn to the attention of Amigo and SchemeCo and, in turn, will be drawn to the attention of the Court at the convening hearing. The concerns of the FCA include the fact that customers with valid redress claims in the Scheme stand to receive significantly less than the value of their claims and the methodology for claims assessment, in comparison to the typical approach of the FCA and FOS.
Amigo and SchemeCo continue to believe that the Scheme will provide the best outcome for both past and present customers in a manner that is fair and equitable. Amigo and SchemeCo expect customers and the FOS to be given the opportunity to decide for themselves whether to support the Scheme or to oppose it in favour of the alternative, an insolvency proceeding, notwithstanding any concerns which the FCA may have.
Gary Jennison, CEO of Amigo, said: "We are grateful for the work of the FCA and the time they have dedicated to understanding and enhancing Amigo's Scheme of Arrangement. Their letter is a significant step forward ahead of the first court hearing next week. We look forward to our customers having an opportunity to vote and support the Scheme, which after careful consideration, we believe, is the only real option for customers who are due redress to receive cash compensation. Given it is in their best interests, we strongly encourage our 700,000 past customers and 300,000 present customers to support the Scheme.
"Looking ahead, we are seeing significant pent up demand for loans from those who are unable to easily get credit from mainstream finance. It is vital that these millions of UK adults are able to access credit from, regulated business such as Amigo, rather than less reputable alternatives. Financial inclusion is going to be increasingly important in the months ahead and we want to play our part in ensuring the underserved have somewhere to turn for help and support."
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it applies in the United Kingdom by virtue of Section 3 of the European Union (Withdrawal) Act 2018. The person responsible for this announcement is Roger Bennett, Company Secretary.
www.amigoplc.com
Company
Amigo Holdings PLC investors@amigo.me
Kate Patrick Head of Investor Relations
Roger Bennett Company Secretary
Media
Hawthorn Advisors amigo@hawthornadvisors.com
Lorna Cobbett Tel: +44 7771 344 781
Notes to Editors:
§ The Court convening hearing for the Scheme is listed for 30 March 2021 and if passed by the Scheme creditor vote, the final Court sanction hearing is expected to be held on 19 May 2021.
§ £15.0 million in cash will initially be made available for claims under the Scheme, with up to a potential further £20.0 million dependent on the volume of claims received from current customers relating to loans with outstanding balances. Amigo will continue to be responsible for all customer balance adjustments in full.
§ Amigo will make an annual cash contribution to the Scheme based on 15.0% of pre-tax profit for the next four financial years beginning on 1 April 2021 up to 31 March 2025.
Additional information
This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to this announcement or otherwise.
Senior Secured Notes
This announcement constitutes notice by Amigo Luxembourg S.A. (the "Issuer") to the holders of the Issuer's 7.625% Senior Secured Notes due 2024 (for the notes issued pursuant to Rule 144A of the United States Securities Act of 1933, ISIN: XS1533928468 and Common Code: 153392846; for the notes issued pursuant to Regulation S of the United States Securities Act of 1933, ISIN: XS1533928625 and Common Code: 153392862) (the "Notes") issued pursuant to pursuant to Section 4.03(a)(3) of an indenture dated January 20, 2017 among, inter alia, the Issuer, the guarantors named therein and U.S. Bank Trustees Limited, as trustee and security agent. Amigo Holdings PLC is the indirect parent company of the Issuer. This announcement shall constitute a "Report" to holders of the Notes.
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