Amigo shares tank as it awaits court decision on rescue plan
Amigo Holdings shares tanked on Friday after a temporary trading suspension was lifted, with the guarantor lender’s fate hanging in the balance as it awaits a court decision on its rescue plan.
Earlier this month, Amigo said that most of its creditors had voted in favour of a rescue scheme that will see them get less compensation for misselling than they are owed, but the Financial Conduct Authority said it was set to oppose it on the basis that it was unfair.
Amigo had already said it would go bust due to misselling compensation if the plan does not go through, leaving claimants with nothing at all.
The scheme also needs to be sanctioned by the High Court and a hearing was held on Wednesday. Amigo had requested the temporary trading suspension pending an announcement. "In light of the limited capacity of attendees at the public hearing, there is the possibility for asymmetric information in the market should significant market sensitive information be released during the Court hearing, before the company has time to update the whole market," it said.
However, the judge presiding over the hearing did not give a judgement on the day. Amigo said he "will do so in due course".
As a result, the subprime lender applied on Thursday for the trading suspension to be lifted pending an announcement on the outcome.
"The company is not able to confirm when the decision on the Scheme of Arrangement will be delivered by the court or when and how it will be announced," it said.
At 0910 BST, the shares were down 29.4% at 16.65p, having fallen to as low as 11.41p earlier.