Business
Update on Capital Raise and Scheme of Arrangement
Update on Capital Raise and Scheme of Arrangement.
About this update from Amigo Resources Plc
[{"type":"text","content":"\n \n \n \n 10 March 2023\n \n \n \n \n Amigo Holdings PLC\n \n \n \n \n \n \n \n Update on Capital Raise and Scheme of Arrangement\n \n \n \n Amigo Holdings PLC (\"Amigo\" or \"the Company\"), a provider of mid-cost credit in the UK,\n \n \n announced a Scheme of Arrangement, sanctioned by the High Court in May 2022, which contains a Preferred Solution which is conditional on the completion of a 19:1 capital raise by 26 May 2023, followed by the contribution of a minimum £15m payment to the Scheme fund for creditor redress.\n \n \n \n \n \n Unfortunately, following extensive engagement with a large base of potential investors since commencing a marketing process in October 2022, ongoing conversations with potential equity investors over providing the full publicly stated equity capital requirement of £45m concluded on Wednesday evening, and the Company has not received sufficient aggregate indications of interest to cover the total amount.\n \n \n \n \n \n Whilst the Board continues to remain open to proposals, it believes that this target is unlikely to be achieved by 26 May 2023 to allow the continuation of the business under the terms of the Preferred Solution.\n \n \n \n \n \n To date, Amigo has received:\n \n \n ·\n indicative proposals sufficient to finance its debt requirements; and\n \n \n ·\n indications of interest in equity capital subscriptions to fund £21m, comprising £11m in ordinary share capital and £10m in exchangeable notes.\n \n \n \n \n \n In the light of the indications of interest received and investor feedback, Amigo is exploring:\n \n \n ·\n modifying its business plan to reduce working capital requirements by up to £3m; and\n \n \n ·\n whether a potential new scheme, to eliminate the £15m capital commitment to Scheme creditors, is likely to succeed.\n \n \n \n \n \n The working capital requirement reduction, taken together with the effect of a new scheme, if sanctioned, could reduce the overall equity capital requirement from the anticipated Capital Raise from the current 45m to approximately £27m, leaving a shortfall on current indicative interest of £6m, which would need to be provided by existing shareholders and other as yet unidentified investors. Any new scheme would not impact the £97m committed to the Scheme, which will remain availabl...