Amigo Holdings PLC (lon:amgo)
AMGO – JB Still Seems To See Himself As The Good Guy

Amigo Holdings PLC Share Price
Grade:The Pink Grade - A Pure Slightly Informed Gamble, The Market Doesn't Like The Company But I Think That I Understand Why.
Title: AMGO – JB Still Seems To See Himself As The Good Guy
Company: AMGO - Amigo Holdings PLC
Share Price Then: 12p
Author: Ian Smith
Date: Mon 14 Sep 2020
Comments: The latest RNS from the Amigo board is sad, on one hand they clearly have a duty to point out facts, they are correct that Richmond can only buy 20% (as Amigo are a “Non Directive Firm”) without FCA approval and further regulatory approval will be needed for Gary Jennison and Jonathan Roe

But they have a problem in that Glen Crawford also requires regulatory approval and we are told that he is critical to the company.

Looking at the CVs of GJ and JR it seems that their approval or not is just as likely as GC’s but the language of the RNS seems to try and suggest otherwise.

The RNS also goes on to say that if JB is appointed as a director, the board may not appoint him CEO, again this is a fact, but what does it say about the board?

That they are not going to follow the shareholders’ clearly expressed wishes for the direction of the company? Of course the shareholders may not vote for JB as a director and wish to continue on the current path.

On the other hand JB is on twitter telling everyone how he can solve the problems and how he cares for the small shareholders, despite trashing the share price by selling his stake on a fixed schedule and how he is the good guy.

Apologies for the price drop at the end there. That was our broker shaking the last of the crumbs out of the bottom of our box of Amigo shares.

Who is he apologising to, the people who bought in a 275p at the float in Jun 2018, 164p when the company’s problems started to become apparent in Aug 2019 and 80p by the end of Aug 2019 when the implications of these problems became clear.

No, it seems that he is apologising to those who bought in at 6p-12p hoping to make a quick profit.

It is interesting that the JB didn’t address the 20% controlling interest threshold in his tweets about buying 29%, is he assuming that approval will happen quickly and almost automatically?

I don’t see this, approving a group of individuals as directors doesn’t necessarily mean that that a related but separate legal entity, RGL, would be waved through as an owner with a controlling interest.

Especially when that entity recently appears to have dumped its 60% shareholding to get out of a Relationship Agreement and then wants to buy the many of those shares back at a massively deflated market price.

This omission could simply have been because it is too complex a subject for a tweet or it could be that it is not seen as a real issue. As there has been time to address this outside of twitter it seems more likely that it is not being explained as it is not regarded as an issue.

Even a 19.9% holding is close to a an effective controlling interest especially if most of the remaining shares are in the hands of retail investors.

Given that Amigo are going to be in a quite “complicated” discussions with the regulators this is worrying especially as JB has made comments stating that he wants to move Amigo funds outside of the regulated credit market.

JB is still trying to sell himself as the good guy despite all the recent shenanigans but don’t forget that Amigo offer loans at 49%APR to people with a guarantor for that loan.

My worry is that all of this indicates someone who doesn’t like to have his actions scrutinised and deemed unfair, which is going to be a problem in financial services, don’t forget Amigo brought in Hamish Paton from Brighthouse.
Read Count/ID: 84/14180

Buy/No Buy In A Nutshell
NegativesA combination of making risky loans and an unwillingness to tell complainants and regulators that the borrower and guarantor has the majority of the responsibility as they asked for and accepted the loan
PositivesNew management could get much more aggressive with people complaining that they asked for and were given loans but they can't afford them.
Initial Review Price7p
Last Review Price17.8p
Last Review Date21-Aug-2020
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