Monday 7 September 2020 11:16 am

Amigo seeks to calm nerves as battle for future hots up

Subprime loan firm Amigo has sought to pour cold water on rising interest in the potential return of founder James Benamor to the embattled business ahead of its upcoming general meeting.

Over the weekend Benamor shared extracts of an irrevocable bid to buy 29 per cent of the company at 20p per share on social media.

Read more: Amigo shares rise as founder pushes for takeover

According to the document the transaction must take place within 30 days of Benamore being appointed chief executive, or before 1 February next year.

In a filing this morning, Amigo looked to quash any additional attention Benamor’s gambit had stirred up, stressing the offer was contingent on his election as chief executive.

Even if Benamor is elected, he will not automatically become the firm’s boss as his appointment will need to be ratified by the Financial Conduct Authority (FCA).

Amigo is currently under investigation by the watchdog over how it assesses the creditworthiness of customers.

It also said that in order for Benamor’s Richmond Group to complete the stock purchase, it would need the FCA’s approval.

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Finally, it denied that Amigo’s board was considering a share buyback. “This is not the case. There are no current plans to buyback any shares of Amigo”, it said.

Benamor, who stepped away from the company after it listed in 2018, has been publicly arguing with the company’s management over strategy since late last year.

The lender, which provides loans to borrowers who struggle to obtain credit from mainstream lenders if a friend or family member can act as a guarantor for them, last week reported a more than 80 per cent drop in profit in the first quarter.

Read more: Amigo Loans chief exec threatens to resign if former boss rejoins company

Benamor called for a shareholder vote to oust finance director Nayan Kisnadwala and board member Roger Lovering, as well as to reinstate himself as chief executive.

The board has advised shareholders to vote against Richmond Group’s proposals at the meeting, the date of which will be announced on Friday.