Shares in Amigo Holdings plunged over 50% after the lender could enter insolvency if a new rescue plan is not approved, according to a report by Reuters on Monday.
- Amigo has been fighting for survival after a series of customer complaints early last year of misspelling loans.
- The London High Court in May 2021 had also rejected the company’s first business rescue proposal for short-changing compensation claimants.
- The company stated the new 97 million pound rescue plan planned in December would likely comprise a rights issue of almost 19 new shares for each existing share, diluting the holdings of existing investors.
- Ronan Dunphy, a banking analyst at Goodbody, stated that even though there is positive progress on the Scheme of new business plans, the statement also outlines the degree of prospective dilution for existing stakeholders.
Amigo shares plunged nearly 58% in morning trading on the London Stock Exchange. AMGO down -43.07%