Amigo Loans’ release of its annual results for the year ending on 31 March 2021 has been pushed back, following a letter it received from the Financial Conduct Authority (FCA).
The FCA’s correspondence was regarding the company’s plans to seek approval for a new scheme of arrangement to deal with current and potential redress creditors. The regulator raised some issues that could impact on forward-looking statements contained in the company’s annual report.
Its new scheme of arrangement comes after the High Court rejected Amigo Loans’ proposed redress scheme. Announced towards the end of May, Justice Miles issued a ruling saying he was “not satisfied that the court should sanction the scheme.”
The case saw the FCA oppose the payday loan company’s proposal because of its belief that the scheme was “inherently unfair”. It added it thought it would “place a disproportionate burden on consumers, as opposed to shareholders and bondholders, to keep the company afloat.”
Amigo has said it will continue to correspond with the regulator in order to construct a scheme that deals with the key points in the judgment on the original scheme of arrangement.
The FCA has also confirmed that it would not expect to authorise a return to lending by Amigo until after the sanctioning of a new scheme by the High Court. This includes the fact that the company must demonstrate its financial viability and ability to meet its regulatory obligations.
Commenting on the news, Amigo’s chief executive Gary Jennison said: “As a new board and management team we remain focused on finding a solution to the issues caused by historical lending. Our priority is to successfully present a revised scheme of arrangement but working through this is clearly very complex which has impacted the timing of our results.
“We continue to believe this is the best route forward for all our stakeholders, and specifically for those customers who have a valid claim for redress, and we are engaging constructively with the FCA taking on board their views and the comments made by the court.”