(Correcting the loan category that was reduced by the company.)
(Alliance News) - Guarantor loans provider Amigo Holdings PLC on Monday said it has reduced the size of its securitisation facility to GBP250 million from GBP300 million and has extended the waiver for the performance trigger condition on the lending facility.
The company has secured an extension of the securitisation facility performance trigger waiver period to December 18. This follows the extension of the waiver to August 14.
The waiver allows both Amigo and its lenders to "fully understand the impact of Covid-19 on the business, whilst maintaining the existing facility", the company explained.
The reduction in the loan amount was attributed to Amigo's current lower funding requirements as the company has halted lending to customers.
The company plans to use all cash generated from customer loans to further reduce the outstanding loan balance. The loan is currently drawn at GBP199 million.
Amigo said it has adequate liquidity to continue to fund operations and support its customers, with close to GBP145 million cash as at July 31.
Shares in Amigo were up 7.2% at 8.98 pence each in London on Monday morning, giving a market capitalisation of GBP42.1 million. The stock has lost 86% in value since the start of 2020.
Amigo floated in June 2018 at a price of 275p, giving a market capitalisation of GBP1.31 billion.
The company had put itself up for sale back in January, but ended this following the withdrawal of potential acquirer. In April, its majority owner, Richmond Group Ltd's James Benamor, called for the lender's entire board to be ousted after saying the company is "committing slow motion suicide", but shareholders rejected Benamor's resolutions.
Amigo and Benamor settled their dispute in June, with Benamor deciding to sell his entire 61% stake in the company.
For its financial year ended March 31, Amigo posted revenue of GBP294.2 million, up 8.7% from GBP270.7 million recorded the year prior. However, pretax loss was GBP37.9 million, swinging from a profit of GBP111.0 million. Net loan book was GBP643.1 million, down 9.1% from GBP707.6 million.
The deterioration in its financials was driven by an increase in complaint volumes, resulting in a complaints cost of GBP126.8 million compared to a cost of GBP100,000 in financial 2019. The company has set aside a provision of GBP117.5 million to handle the complaints compared to no provision as at the end of financial 2019.
By Tapan Panchal; tapanpanchal@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
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CORRECT: Amigo Cuts Loan Size And Gets Waiver To Performance Condition - Morningstar
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