Amigo Loans’ major shareholder has confirmed its intention to sell its controlling stake in the guarantor lender.
Richmond Group, which owns 60.66 percent of the lender, has launched a strategic review and formal sale process, which it said “may result in a sale of the company or a sale of some or all of the company’s business”.
In December 2019, three board members, including chief executive Hamish Paton, announced they would step down as its founder James Benamor, who heads up Richmond, returned to its board.
Amigo is the UK’s largest provider of guarantor loans and offers an interest rate of 49.9 percent APR.
In November, the Financial Conduct Authority (FCA) told Amigo it must more clearly explain the risks to people when they agree to act as a guarantor for a friend or family member.
In an update to the stock market today (January 27, 2020), the company said it continues to face a "challenging operating environment".
It added: "While Amigo remains confident in the robustness of its approach to lending decisions, we are concerned that there may be increased pressure on our business and a continual evolution in the approach of the Financial Ombudsman Service. Future lending volumes could be impacted by the strategic review of the business model."
Mergers and acquisitions in the alternative lending sector will be discussed at the Credit Summit, where Hamish Paton will be among the speakers.