FIRM UP FOR SALE AS FOUNDER EYES EXIT
THE owner of controversial lender Amigo has put the business up for sale, causing its share price to crash.
Millionaire James Benamor put his 60% stake on the block, as the firm added it faced “challenging” trading.
Amigo is a leading provider of guarantor loans, where borrowers with poor credit ratings get someone else to agree to meet their repayments if they don’t.
City watchdog the Financial Conduct Authority last year warned guarantors don’t always understand the risks they take on.
Amigo also highlighted “a continual evolution in the approach of the Financial Ombudsman Service”.
The Ombudsman had 226 complaints about Amigo in the six months to the end of September, with 59% found in the customer’s favour.
Amigo’s typical annual interest rate is 49.9%, meaning someone borrowing £4,000 over three years would pay back a total of £7,025.
Former pensions minister Baroness Ros Altmann said recently: “These kinds of loans are a significant concern.”
The news that Benamor might want out comes just weeks after the 42 year old staged a boardroom comeback.
Bournemouth-based Amigo
Holdings listed a number of potential outcomes from a strategic review.
Amigo was valued at £1.3billion when it floated on the stock market in 2018. Its shares have dived since, with yesterday’s 28% slump leaving it worth less than £230million.
Amigo’s customer numbers rose by nearly 18% to 222,800 in the six months to the end of September, but profits fell 12.6% to £42.3m.
Benamor created Amigo in 2005, setting itself up as a responsible alternative to payday lenders.
He owns just over 60% of the firm through his investment vehicle, Richmond Group.
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