Amigo Holdings is facing insolvency after the High Court rejected a rescue plan by the guarantor lender that would have seen compensation payments for mis-selling capped.
The company, which was charging a representative APR of around 50%, confirmed on Tuesday that it will not be pursuing an appeal following the Court judgment.
“The board of Amigo continues to consider all options, which includes insolvency, and whether it might be possible and appropriate, given the cost of a scheme, to promote another scheme of arrangement to avoid insolvency,” it said. “The issues and challenges facing Amigo are complex and Amigo will continue to liaise in the coming weeks with its regulator the Financial Conduct Authority (FCA) to seek to address its concerns as quickly as possible.”
Amigo said the payment of redress creditors will continue to be stopped until further notice and that its full-year results will be delayed.
Chief executive Gary Jennison said: “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.
“The board is committed to finding the best solution it can for Amigo’s customers and other stakeholders and will be working with its stakeholders, including the FCA, to achieve that solution as quickly as it can.”
