Borrowers who were wrongly sold loans that Amigo could not afford have thrown the struggling company a lifeline by voting for a compensation program that could allow it to continue operating.
The company said its creditors had voted for a plan which it hopes can give them 42p for every pound owed to them.
The proposal was supported by nearly 89% of customers who voted and beat out a second proposal which would have liquidated the company with a lower payment to customers.
“Our customers voted in favor of the new business program, which the Amigo Board of Directors believes provides the maximum possible recourse to creditors,” Chief Executive Gary Jennison said.
Approval of the program will provide the best possible outcome for creditors, and Amigo’s proposed return to lending will allow us to play an important role in the non-conventional lending industry.
“This is an important step in settling liabilities arising from historical lending practices under previous management.
“However, the new trade regime has yet to be sanctioned by the court.”
The case will go to court on May 23 and 24.
The company’s future has been in limbo for two years after receiving so many compensation claims it simply couldn’t pay them all.
“Amigo does not have enough money to pay the full amount of cash compensation to people who have valid claims,” the company acknowledged in a document sent to plaintiffs.
A year ago, aggrieved customers voted in favor of another deal, which would have given them just 10p for every pound they were owed.
But this was rejected by the High Court, which said it was not fair. “We learned from the court’s decision,” Amigo said as the final vote approached.
So over the past few months, he worked with a panel of eight randomly selected clients to devise two new options that all creditors could then vote on.
Although this is just an estimate, the company believes it can repay 42p for every pound owed if it can continue to trade and certain other conditions are met.
The other option, which also passed in the vote but with a lower tally, would cut Amigo and return 29p for every £1 it owes customers with valid claims.
The company is still under investigation by the Financial Conduct Authority (FCA). It will have to sell new shares and dilute the ownership of its former shareholders to raise funds to pay back customers.
Mr Jennison said: “We would like to thank all the customers who have taken the time to have their voices heard, as well as the FCA who confirmed last month that there had been a significant improvement in the conditions of the program compared to to the first Amigo program.
“Approval of the program will provide the best possible outcome for creditors, and Amigo’s proposed return to lending will allow us to play an important role in the non-standard lending industry at a time of unprecedented cost of living increases. “