UK subprime lender Amigo Holdings said today it would wind down after failing to secure adequate investor interest in a crucial capital raising, ending months of efforts to restructure its ailing business.
The company specialises in providing credit to borrowers typically excluded by mainstream banks.
Its shares crashed 79% in early trading after it said it would stop lending immediately and begin a 12 month wind-down process.
"This is a very sad day for all our employees who have worked extremely hard to address historic lending issues and rebuild a new Amigo, and for our shareholders and wider stakeholders," Danny Malone, chief executive officer, said.
The loan book will continue to be collected during the wind-down phase and employees will continue to be paid, the company said.
A spokesperson said the company employed fewer than 200 staff.
Amigo has been scrambling to survive after struggling to cope with the cost of compensating customers for missold loans.
It had attempted to secure £45m of capital from investors as a part of a reorganisation of its business, but has repeatedly warned it was struggling to secure adequate interest before a regulator-imposed deadline of May 26.
Shares have collapsed 99% from a high of 315 pence shortly after a 2018 IPO valuing it at £1.3 billion.
"The current board came into Amigo to save the company because we believe passionately that there is a need in the market for a regulated mid-cost lender that meets the demand of financially excluded people who deserve access to regulated credit," the CEO said.
