British subprime lender Amigo said today it was struggling to secure the additional £45m of capital from investors it had targeted as part of a court-approved rescue plan, and was exploring its options.
Amigo has been scrambling to secure backing from investors for a new lending business plan, after the cost of compensating past customers for missold loans pushed it to the brink of collapse.
The lender said expressions of interest it had received for its planned capital raise after concluding talks with potential investors fell below its target.
It said it did not believe this could be achieved by its May 26 deadline.
Amigo shares fell 32% in early trading.
The company said it was exploring modifying its business plan and eliminating the £15m contribution from new investors required towards compensating past customers.
With these changes, Amigo said it could target a smaller capital raise of £27m - but would still face a £6m pound shortfall based on current interest.
Any new scheme would require fresh approval from the High Court and creditors, Amigo said. The company said it was engaging with the UK regulator, the Financial Conduct Authority (FCA).
An FCA spokesperson said: "We are aware Amigo is exploring the feasibility of a new Scheme of Arrangement. We will be looking closely at any new proposals, and the impact on the current Scheme and conditions already agreed by the High Court."
