Morses Club: Doorstep lender seeks London delisting in bid to secure survival as shares plummet 70 per cent
Morses Club will seek shareholder approval to delist from AIM as it battles with continuing financial uncertainty deriving from customer complaints about unaffordable lending .
The provider of non-standard credit said that trading on AIM did not provide the company with access to capital in the medium to longer term nor provide “significant liquidity to investors”.
Shares in Morses fell over 70 per cent this morning before recovering to trade around 5% lower.
Morses Club faces a number of outstanding complaints from customers regarding unaffordable lending and its failure to perform adequate credit checks on borrowers.
A Morses review in August alongside its annual results identified a potential gross redress owed to customers of £112m.
In December, it issued a scheme of arrangement which estimated that customers will receive between 40 per cent and 55 per cent of the cash compensation they are owed. In order to complete the scheme, Morses needs to raise £15m as its current funding facility expires in March 2023.
Without the scheme of arrangement, the company would be threatened by insolvency. It said that “the most likely source of future funds will be through private capital”. A court hearing for the scheme of arrangement is scheduled for 7 March.
Cancellation requires the approval of over 75 per cent of shareholders when the general meeting is held on 3 February. It has already received approval from more than half of its shareholders.
If it is approved, its shares will be cancelled on 13 February before it will seek to relist as a private company in the week commencing 20 February.