(Reuters) – Shares in Amigo Holdings sank more than 50% on Monday after the British subprime lender said its loans unit could enter insolvency if a new business rescue plan was not approved by creditors and in court.
Amigo has been scrambling for survival after a deluge of customer complaints that it mis-sold them loans, with a previous rescue plan for the business rejected last year by London’s High Court for short-changing compensation claimants.
“Should creditors vote for the New Business Scheme and the Court subsequently approve it, these provisions provide additional protection for creditors and address certain of the concerns raised by the Court above the previous scheme,” Amigo Chief Executive Officer Gary Jennison said in a statement.
“They are necessary for Amigo to survive and avoid insolvency.”
Amigo shares were down nearly 55% at 2.7 pence on the London Stock Exchange by 0855 GMT.
(Reporting by Sinchita Mitra in Bengaluru; Editing by Subhranshu Sahu)
