Shares in British small-cap Amigo Holdings more than tripled today after the company said it had granted shareholder Michael Fleming an exclusivity agreement, allowing the financier to look for financing options.
Shares in the subprime lender rose by as much as 300% to 1.30 pence, giving the company a market cap of £1.53m.
Troubled Amigo has seen its share price tumble from a high of £3.15 in 2018 after battling with the cost of compensating customers for missold loans.
Amigo, which had said in March that it would wind down after it failed to raise sufficient funds, said the agreement would not stop the company from progressing with the disposal of assets under its wind-down plan.
The exclusivity agreement, which expires on September 6, means Amigo cannot borrow funds from any other source other than Fleming, the company said in a statement.
The company said there were still significant challenges to any new cash being made available to the business.
Amigo added it saw a very low likelihood of a successful conclusion to any discussions arising because of the agreement.
"Establishing a new business and potentially creating value for shareholders in the longer term, has significant execution risks and will require regulatory approval," the firm said.
