Amigo Holdings Explained

Amigo Holdings
Type:Public
Foundation:2005
Founder:James Benamor
Location:Bournemouth
Area Served:United Kingdom
Key People:Jonathan Roe, Chairman
Danny Malone, CEO
Industry:Finance
Services:Guarantor loans
Revenue:£210.8 million (2018)[1]
Operating Income:£66.1 million (2018)
Net Income:£50.6 million (2018)
Homepage:

Amigo Holdings is a guarantor loans / subprime lender.[2] It is listed on the London Stock Exchange.

History

The company was established as a mid-cost[3] guarantor loans lender by James Benamor in 2005.[4] Benamor stood down as CEO, handing over the role to Glen Crawford, in 2015.[4] In June 2018 the company was the subject of an initial public offering on the London Stock Exchange which valued the company at £1.3 billion.[4]

The company announced in July 2020 that it would be providing at least £35 million in order to address consumer complaints regarding lack of checks on affordability when taking out a loan.[5]

Amigo Holdings trading as Amigo Loans was involved in a case in Redhill County Court on 14 September 2016, when a Miss Abbas successfully defended a claim of circa £5,000 by Amigo Holdings on the basis that she never received a copy of the loan agreement.[6]

On 1 June 2021, it was reported that Amigo faced possible bankruptcy after a High Court judge rejected an attempt by the company to cap payouts to customers. Gary Jennison, Chief Executive Officer of Amigo, commented: "Without a scheme, Amigo faces insolvency as it will be unable to satisfy its customer compensation claims as well as meeting the legally binding funding obligations owed to its secured creditors."[7]

Operations

The company is a business which issues mid-cost[8] loans with payments guaranteed by a borrower's family or friends.[9] The amount lent is up to £10,000, with a 49.9% APR, higher than loans from mainstream banks, but lower than high-cost products such as payday loans or rent-to-own.[10] The company has secured around 88% of the guarantor loan market in the UK.[11]

Ownership

Approximately 61.4% of the company was owned by Richmond Group, a business controlled by James Benamor, the founder.[12] Benamor sold his complete shareholding in June and July 2020 after failing to change the composition of the Board of Directors.[13]

External links

Notes and References

  1. Web site: Annual Report for year ended 31 March 2018. Amigo Holdings. 7 September 2018.
  2. News: Guarantor loans provider Amigo set for London IPO. Financial Times. 7 June 2018 . 7 June 2018.
  3. Web site: Glossary Terms - FCA Handbook. www.handbook.fca.org.uk.
  4. Web site: Sub-prime lender Amigo valued at 1.3 billion pounds in London IPO. Reuters. 29 June 2018. 7 September 2018.
  5. Web site: Lender Amigo to set aside more cash to settle complaints. 3 July 2020. Reuters. 8 July 2020.
  6. Web site: Landlord Advice UK Abbas-v-Amigo Loans. 2021-05-16. landlordadvice.co.uk. 18 June 2017 . en-GB.
  7. Web site: Amigo faces insolvency after court throws out payouts bid. London Loves Business. 1 June 2021.
  8. Web site: Amigo Loans arrives to high expectations. Investor's Chronicle. 5 July 2018.
  9. Web site: Guarantor loans provider Amigo set for London IPO. FT. 7 June 2018. 7 September 2018.
  10. Web site: Amigo Loans reports 40% jump in revenues. Financial Times. 27 November 2018.
  11. News: Lender Amigo hits London market with £1.3bn valuation. Financial Times. 29 June 2018 . 29 June 2018.
  12. Web site: Prospectus. Amigo Holdings. 5. 7 September 2018.
  13. Web site: Amigo founder instructs broker to sell entire stake if company board is not replaced. Proactive Investors. 18 June 2020. 21 June 2021.