Amigo Resources PLC (AMGO) Earnings Call Transcript & Summary

Good morning, and welcome to Amigo's General Meeting to everyone here in Bournemouth and to those on Zoom joining us remotely. I'm Jonathan Roe, Chair of the Amigo Board. With me here today is the Board of Directors. That is, to my left, our Chief Executive, Danny Malone; and to his left, our Chief Financial Officer, Kerry Penfold. We have our company Secretary, Roger Bennett, at the far end. And to my right, we have Maria Darby Walker, our Senior Independent Director; and Jerry Loy, another Non-Executive Director. Somewhere in the Zoom we have Michael Bartholomeusz who sent his apologies couldn't -- he's unable to make it today.

Jonathan, I'll just -- I think people can't hear, can they? So I suggest people move over to this side so that they can hear.

No worries. Apologies. I should try and project. Do you want me to start again? Welcome. A few quick housekeeping points. May I please remind you to switch off your mobile phones. And for those with us today here in Bournemouth, the emergency exits can be found in each corner with the door. As we have a quorum in the room and it's past 10:00, I now declare the meeting open. The purpose of today's meeting is required by Section 656 of the Company's Act to address the matter of the company's net asset position relative to its called up share capital. Specifically, where the value of a company's net assets is less than half of its called up share capital, the Directors are required by the Company's Act to call a general meeting to consider whether any and if so what steps should be taken to address the situation. We've been very clear with shareholders on our capital position, which arose as a result of a significant number of complaints received relating to historical lending practices and the steps we are taking and have already taken to address this. However, we did this through market announcements, other shareholder updates and results presentations as well as at our AGM. But we did not call a general meeting specifically to discuss the net asset position of the company on a nonconsolidated basis, which we should have done. This is an oversight on our part due primarily to the key focus having been on the business at a consolidated level. It's a technical point, which we are going to remedy at this meeting. In a moment, I will hand over to Kerry to discuss the company's financial position in more detail. Danny will then outline the steps we are taking to address this situation. Finally, before we close the meeting, we will open the floor to questions. First, before I hand over to Kerry, I would like to read to you the update we issued to the market earlier this morning. For those in the room, you will find a copy of the announcement on your seat. But what we said this morning on RNS was since the release of the quarterly results on the 23 February 2023, there has been no material change in the trading activity for the runoff legacy loan book. Demand for the new RewardRate brand remains strong, the conversion rate is improving but remains challenging, and the current run rate for monthly originations remains in excess of GBP 1 million. As noted in the Q3 results, lending to date has shown that the conversion rates are higher with a non-guarantor product. Until Amigo has completed a capital raise, the Board is focusing on the more -- most efficient use of capital. Given the higher acquisition cost per loan of the guarantor product and the higher conversion rates for the non-guarantor product, the decision has been taken to temporarily pause the guarantor loan offer. The Board remains confident in the long-term viability of the guarantor model. Amigo also reports the exit on the 28 February 2023 from its loss-making Irish business. The Ireland business ceased new lending activities in 2020. While conversations with potential investors to underwrite a GBP 45 million equity raise continue, Amigo is yet to secure the full amount required, and the situation remains extremely challenging. As disclosed with Amigo's Q3 results, nonbinding indicative interest for between GBP 10 million and GBP 15 million of equity and GBP 10 million of exchangeable notes has been received. Under the terms of the scheme, if and as soon as, the Board expects the capital raise will not be successful, it is legally bound to switch the scheme to the fallback solution, which is an orderly wind down of the business. Thank you. I'll now hand over to Kerry.

Thank you, Jonathan. As outlined in the company's 2022 Annual Report and accounts, at the balance sheet date of 31 March '22, the company that is Amigo Holdings plc legal entity had net liabilities of GBP 43.7 million and called up share capital of GBP 1.2 million. This meant that the company's net assets on a nonconsolidated basis were less than half of its called up share capital. It's important to note that this is on a nonconsolidated basis. At consolidated level, on the 31 March '22, the Amigo Group had net assets of GBP 47.9 million. And in our recent Q3 results, we announced net assets at 31 December '22 of GBP 26.6 million. The stand-alone company financial position is due to the impairment of carrying value of subsidiaries in the accounts. Under international accounting standards, when there are indicators of impairment such as a lower share price, the company is required to carry out an impairment review of its investments. Given the uncertain nature of the future value of the Amigo Loans Group, as reflected in the directors' assessment of going concern, this review resulted in a write-down and consequently, the negative net asset position presented in 2022 financial year accounts, which is therefore not a new development. And as Jonathan has said, one that has been flagged many times in our market announcements. It should also be noted that whilst the impairment review requires an element of estimation and judgment, the requirement to undertake the review is clearly defined. The value of net assets of the company continues to be less than half of the company's called up share capital. The share price continues to act as an objective indicator of impairment. In line with our Q3 assessment, pending successful completion of the capital raise, the group's ability to continue as a going concern remains uncertain. I will now hand over to Danny who will go through the steps we have taken and are taking to address the company's financial position.

Thanks, Kerry and Jonathan, and good morning, everyone. The Board has done a number of things to address the company's financial position. Most importantly, the Board proposed a scheme of arrangement to cap the amount of redress payable to creditors with complaints related to past lending. In May '22, Amigo scheme was sanctioned by the high court. The scheme is the most equitable way for Amigo to ensure that all those with valid complaints receive redress and it enables Amigo to maximize redress by trying to continue as a going concern. We are also seeking to raise additional capital. As part of the scheme, our 19:1 capital raise must be completed by the 26 May 2023. This will not only provide a further minimum GBP 15 million of redress to scheme creditors but also recapitalize the business with GBP 30 million of working capital, which will support ongoing operations. It is critical that we raise the full GBP 45 million. It is not possible to raise only the GBP 15 million by the scheme deadline and more at a later date. This is because all net assets from the legacy loan book are committed to the scheme. Once this is paid, without the additional GBP 30 million raise, the business will have no equity funding to continue. Moving to Slide 9, I'll give a little bit more detail on the steps we have taken to secure funding and the steps we still need to take to complete the capital raise. We have approached nearly 200 potential investors. This has been done via a variety of introducers, not just our 2 primary financial advisers. The executive team and I have held many prospective investor calls and meetings. So far, as we said at the time of our Q3 results, we have received nonbinding indicative offers of between GBP 20 million to GBP 25 million. This consists of GBP 10 million to GBP 15 million of equity from a combination of potential investors and individual existing shareholders, plus GBP 10 million of exchangeable notes that is debt that can convert to equity. We have also received term sheets for the debt facilities required. Conversations to underwrite the remaining capital required are ongoing. The time table to successfully complete the capital raise by the 26th of May deadline is very tight. As of today, with conversations ongoing, the Board believes it is achievable, but we must be clear that the funding gap is large and our options to fill that gap have diminished significantly. On the basis that we can raise the capital required, I want to touch on what the next steps would be. We need first to convert the potential offers of interest to binding offers. Once we know the final structure of the capital raise that we will propose to shareholders, we can finish drafting the prospectus. It will then need to be approved by the FCA before it can be issued to shareholders. We cannot put a time on this, but we believe that the process can be completed in time. Once the prospectus is signed off, the offer can be announced to the market and the prospectus issued to shareholders. At the same time, notice of the general meeting to approve the raise can be issued, a minimum 14 days must be given before the General Meeting takes place. At the General Meeting, Amigo will require over 75% of those that vote to vote in favor of the capital raise for it to proceed. There would also be an offer period during which shareholders can elect to take up their preemptive rights. As we have said, the structure of the capital raise has not been confirmed. This needs to fit with the profile of the ultimate underwriters of the capital raise and will therefore only be known once all conversations with potential investors have finished. The minimum 19:1 dilution is mandated by the scheme and will be a part of the final structure that will be put to shareholders. We also need FCA approval for a change of control for anyone acquiring more than 20% of the share capital. This process normally requires at least 3 months, but we are hopeful that the FCA may be able to accelerate the process should a controlling investor by this definition emerge. Clearly, we can commence this application until we have identified potential controller. As you can see, we may have time, but it is very tight. With consideration to this and the cost involved, if at any time the Board expects that the capital raise cannot be completed successfully by the scheme deadline of the 26 May, then it is legally bound to terminate the process with immediate effect and switch to the fallback solution, which is an orderly wind down of the business. This could happen any day if all investors drop out and there is no viable replacement. As a Board, we are grateful for our shareholders' continued support and patience in what is a very difficult situation. We have a strong belief in the business, but we can only take it forward if we can secure the equity funding required. The Board is exploring all options to achieve the best outcome possible for all our stakeholders and to rebuild a strong business for all. I will now hand back to Jonathan to invite questions.

Thank you, Danny. We'll now open the floor to questions, including to those joining us remotely. [Operator Instructions] So let's start with people who are here in person, and thank you for attending. Yes, do you have any questions?

I am a shareholder. Can you [indiscernible] the process of engagement with shareholders [indiscernible]

There are a number of sort of shareholder groups, of which we have a representative to hear today who we've been in active dialogue. It's very difficult with -- I'm going to say, difficult to deal with retail shareholders. This is because of all the legislation surrounding issues of securities and that kind of thing. So to actually raise the money, we'll be -- we will have to issue a prospectus, which will give you all the details and all of the information about your preemptive rights and preemption will be a key part of it. But you can't -- I can't say -- you have to be given that information because you can't really be signing up to something you don't have the full information for. So there will be future profit forecast and that kind of stuff, and we've not published those yet. So we can sit here today and say, are you okay for x thousand pounds? But it will be inappropriate for us to ask you that question, and it would be inappropriate for you to find that it was a binding commitment because only the binding commitment can come with the full prospectus. Does that help? Any other questions? Or you can come back.

[indiscernible]

Absolutely right. Yes. And that will require a special resolution and a 75% in favor a majority.

Recently [indiscernible] expect to participate [indiscernible] just over 10% which will guarantee [indiscernible] which means we're assuming [indiscernible] nearly 90% of the votes [indiscernible]

All right. When we were seeking to get the scheme approved and we have to remember, we had a failed scheme coming up for 2 years ago. One of the things that the judge and the FCA focused on was that in the event of kind of insolvency then it will be normal for existing shareholders to be diluted. Actually, they set to 2.5% rather than the 5% that's in our scheme. So that was kind of mandated by it. We're fully aware that there is a chance that the shareholders who are unable or unwilling to support and follow their money, may decide to close the business [indiscernible]. They vote against it and the business is shut. But in the event that happens, then there will -- there is nothing left. Shareholders will get nothing. So I can't say I'm -- that 5% is enough to persuade people who don't want to follow their money or can't follow their money. I can't say that's sufficient, but that is where we are. And I do not see any scope for a new scheme, which would change that to 2 for 1 or any other rights issue. You might not have -- you might be aware that [Moses Clark] was in the court yesterday, which Nick can give you some information on. And they are stubbing their toes on exactly the same issue. Nick, do you want to give a quick highlight? No, he doesn't want to give a quick highlight.

[indiscernible]

We don't take that observation lightly. We don't have a choice in the sense of being able to reconfigure it for being a 2-for-1 rights issue or anything like that. We just -- the court scheme demands we do a 19:1. It is a risk. I fully accept it's a risk. At the moment, the risk is finding and giving shareholders the opportunity to allow the business to continue. The next risk will be the shareholders deciding as a collective body that they are not prepared to sustain that. But at that point, they're looking at getting nothing, the company will be in rundown, wind off, and there will be no -- nothing for shareholders. So I'm not -- other than telling you that, that is what the alternatives. But we're desperately trying to come up with the alternative -- to give you an alternative as in raise some money and then put it to the vote if the body of the shareholders says, we are not -- we don't want to do that, then there's nothing that we can do other than say you can have 100% of nothing or 5% of something, which is the normal kind of trivial argument you get. But I can't change the maths of it. Any more questions in the room? All right. Anybody hand up remotely, as I say? Hello?

I've got so many questions, as you can imagine, okay? So might as well stop. 19:1, I've obviously e-mailed as well, so you've probably seen that. Okay, the 19:1 dilution, I agree, shouldn't give me change in it. I shouldn't even be up for discussion. It's a 19:1 dilution. People need to get over it, okay? My problem is the GBP 15 million that you're raising. This is a question to Nick, who didn't answer the last one. You were in charge of this restructuring originally, didn't you think at the time that you wouldn't raise money? Because when you came up with this, shareholders are going to have to put GBP 15 million in the part, what external advisers did you speak to, to say, how much do you think you're going to get from shareholders, so not the 19:1 dilution, we're talking about the GBP 45 million that you're trying to raise and the GBP 15 million that you put into the redress pot? So how did you come up with the number? The shareholders shouldn't give GBP 15 million because it's a nonsense number, you were never going to raise GBP 15 million from existing shareholders at that, right? So you should have factored that in to original scheme, okay? So I agree we can't do a 19:1 dilution, but we should be going back to the FCA to say, look, we haven't got GBP 15 million, we've spoken to 200 investors and only a handful of them are even talking to us. We're not going to get GBP 15 million. We need to change the GBP 15 million. The creditors aren't going to get GBP 15 million, right, because we haven't got it, right? Why are we not doing that? Why is the Board for months instead of keep talking and Jonathan you said GBP 45 million or, sorry, Danny said GBP 45 million. I've underlined it critical, we'll talk about that in a minute because the GBP 15 million is going to redress, okay? But you can't raise it. It should have never been a set amount of GBP 45 million. If you're punishing the shareholders, it should have been whatever we get from the shareholders on the 19:1 dilution, we will take, or it should have been a set amount, okay? In theory, you haven't got it. Market conditions were completely different a year ago and 1.5 years ago, but you should be going back to the FCA to say really thorough, FCA, we thought we could do it, we can't, okay? We need to scrap this GBP 15 million, we'll still do the 19:1 dilution, so that the money raised from shareholders can go back into the new business scheme for future lending, overheads and so on, but we need to wipe the GBP 15 million. And let's be honest, if you took the GBP 15 million out of the redress pot, the creditors would -- and you can answer this because you know the numbers, if you took the GBP 15 million out of the redress pot, the creditors would be still better off than the fallback scheme, yes or no? Because I know they won't and you know they won't, so I just wanted to admit it to everybody on the call, if you took the GBP 15 million out of the redress pot, it's still be better off.

I mean we have clear -- I understand the sentiment, Daniel.

There's no sentiment. I just want you to say yes or no, very simple, yes or no. If you took the GBP 15 million out to the credited part because you can't get it from shareholders, would the creditors be better off still with the new business scheme, pennies on the pound, then they want on the fallback?

They could be.

No, they would be based on the numbers that you've got in front of you. Come on, they would be.

They could be better off. And all of those numbers are based on forecast, not on actuals.

Would that be finish? In fact GBP 45 million is based on forecast because you're trying to raise it, okay? But the answer is pretty simple. They would be better off, okay? So let's just talk about. So we should have gone for the FCA, and we should have got this GBP 15 million removed. We should have gone and said to them. We're not going to raise it. Market conditions have shown us that. The fluctuating share price back in 2022 didn't bring and help us right? But we should be going back to them straight away and say, "Look, we can only be [indiscernible] the creditors are not losing out if we don't give you GBP 15 million. We haven't got the GBP 15 million, we thought we've got, probably no worse off, okay? And we're still employing people. We're still paying taxes. We're still a viable business, okay? And that's what we should be presenting back to the FCA. But we're still going to hurt and punish shareholders by 19:1 dilution, right? We just haven't got the GBP 15 million, okay? But that's -- then you don't need GBP 45 million for a start. You only need GBP 30 million, okay? And then we will talk about the GBP 30 million, shall we, which is just, again, crazy amounts of money. How much of the -- let's talk about your GBP 45 million, but it has actually GBP 30 million if you're going to get like GBP 15 million, how much is going to the overheads of the business, including Director salaries? Because I notice, and I said this on every call, some of you've got a few shares, right? But you're not in it like we are, right? So I want to know why the Board like any of the business person in the world when a business is losing money would take a reduction in salary. So tell me why you [indiscernible]

Maria, do you want to deal with this?

Yes. Thanks.

I know he doesn't have to. I know he doesn't have to. Definitely if you have a failed business, you would take a reduction in salary.

Yes, Daniel, let me answer. It's a fair point. I and Jonathan spoke a while ago, obviously on this very subject. And we're also very conscious of -- and we do pay attention to also discussions in the chat rooms on this issue.

I'm not on any chat rooms by the way.

If you could let me finish the question -- or answer your question, sorry. So Danny's salary is GBP 355,000. So that's a reduction from, as you know, [Gary's] salary, which was GBP 600,000. Kerry has also taken a reduced salary from what Danny was on the CFO. So that's gone down from GBP 355,000 to GBP 220,000.

GBP 355,000, okay, all right.

And the rest are also from the 1 April, taking between 40% to 50% reductions in salaries as well. We recognize that ongoing, we have to be the right size of the business, whether that's remuneration, whether it's overheads or is expenses. Kerry, in particular, focusing on those issues. So I guess the message is we don't want you to think. We never listen, don't listen, we do listen. We have taken action.

Maria, if I may, okay?

Yes.

GBP 350,000 for a failed business and you're a startup. You've told us so many times you're a startup. You're not even a business anymore, is ridiculous. There are cardiac surgeons saving lives earning less money, right? And we've got the Board running a failed business that's spoken to 200 investors and can't find the investment, right, and collectively on over million of pounds worth of wage bills. That's more than the Prime Minister of England earns. And you think that's acceptable. It's crazy. Gary's salary was an absolute joke, right, an absolute joke because he was just keeping the lights on, and I feel you are still keeping the lights on because you're only [indiscernible] It's ridiculous. How many staff have been made unemployed because you've got no business, right? And this is the other thing. How many staff have you -- how many staff still work for Amigo and why haven't you got rid of them if you don't need them because you're a startup, stop thinking we might need them in the future. The redress scheme should be paying the redundancies on those staff that should come out of redress pot. So how many -- and I'm on about not prior, I'm on about in the last 12 months, how many have you gotten rid off and how many have you got now?

Daniel, if I just make some on costs. We are a start-up business and you are right but we are still collecting out the legacy book. We are also running a scheme. All of that requires staff and those staff are paid for by the collections from the legacy book, so therefore, effectively after that redress pot.

Great. I want [indiscernible] your GBP 45 million you're asking for. I'm trying to work out where you need that, okay? So I've already established basically from what you've told me that you've got GBP 1 million worth of [indiscernible] roughly, it's GBP 1 million in directors' money of the GBP 45 million for the next 12 months, right? But how many staff have we got [indiscernible] part of that GBP 45 million? Because if you are a new business with only generating over GBP 1 million a month, you don't need a lot of staff, right? The legacy staff. I'm done with that, it's over. I'm want about moving forward. I'm trying to get this GBP 45 million down. I don't think you need GBP 15 million for creditors. You just need to go back and say we haven't got it, right? And you're still better off if you don't do the fallback scheme, okay? And we still get hit with the 19:1 dilution, that's fine. And that should have been presented to the FCA weeks ago, okay? And you've got proof because you spend to 200-odd people or 200-odd companies that don't want to invest, right? So you've got proved to the FCA that you find that investment. So it's not likely going in pie in the sky. So let's just talk about from when the new business goes live then, how many people are you going to transfer over from old Amigo to the new business scheme?

So that process is ongoing. And we have decided to not bring new people into the business, but redeploy those staff as the legacy book transfers out and we start up the new business. That's a sensible thing for us to do. It means we have trained employees. We don't pay recruitment costs. That is sensible enough prediction and the benefit that we have in the [indiscernible] We will continue to do that, redeploy the staff wherever we can.

Okay. But who will get hit with the redundancy there? A new business scheme or Amigo originally, as in like the creditors, well, they get -- so creditors part, will they get hit for the 100-odd-plus redundancies, you've got to make? Because it shouldn't be us, that's what they voted for. They voted -- and I'll go on to the next question in a minute, but they voted for a new business scheme, set in stone, they said new business scheme. And that comes with the associated costs or a new business scheme. It didn't vote for wind down, which would have been redundancies and so on, okay? They voted for the new business scheme. So I don't understand as well, why in that new business scheme, you didn't have numbers in there to say we don't even need 12 months worth running costs of GBP 15 million or something like that inside that new business scheme proposal or your running costs for 12 months. Why wasn't it included?

It is. It's within the turnover amount. So the turnover amount takes the collections from the legacy scheme and deducts the cost of the legacy business. So the cost of the legacy business are covered within that.

But that's the same with the wind down. It has no future business. That's just covering the cost at all because that's why you're trying to raise GBP 45 million from us. You need that to run for the next 12 months under guidelines, you need 12 months worth of money. You've told us several times, you need 12 months worth money to make it viable. What I'm saying is when we did the proposal for a wind down scheme or a new business scheme, the wind down scheme had the associated cost of [indiscernible] getting that systems, getting with the Directors, paying everybody up and so on. It had associated costs in that number, okay? What I'm trying to say is in the new business scheme that you proposed, and they signed off, why wasn't there an element of funds to come out of the redress pot for the new business scheme to run for 12 months.

Well, I've just told you there is, it's called the turnover amount with new business scheme. The turnover amount is...

So how much -- okay [indiscernible] you don't know what it is.

The cost of the legacy collections and the cost of administering the scheme are deducted from the income from the legacy portfolio and the net amount is passed to creditors. It's still a positive amount based on forecasts. So the costs are being covered by the legacy collections, and that is part of the scheme, the new business scheme.

Okay. And until when?

All costs up until July this year for the whole company, excluding those that are specific to RewardRate, which is primarily underwriters and all direct costs beyond July of legacy collections and the scheme.

Right. So the legacy -- so actually in the fallback scheme, it can just be the longer it takes, the less money they're going to get then, basically?

Not necessarily.

[indiscernible] drags on, and drags on and drags on and you've got more staff to pay then there's less money in the pocket.

Yes, but there's lots of moving parts. That depends on what you're doing during the drag on, whether you're selling off some of the assets or collecting them yourself.

So we'll go back to my third question then, why have we not gone back to FCA to get rid of the GBP 15 million?

We have clear instructions from the court and from the FCA.

Listen, what the scheme towards? They approved that. We know that. Why aren't we going for a new scheme, scheme #3, to say, look, we've done the FCA fine, we're back to lending, the market conditions are completely different from what they were.

Market conditions are different, I accept that.

[indiscernible] shareholders have already been hit with likely 95% anyway. We're going to give them a 19:1 dilution. We've spoken to 200-odd investors, we raised this money, right? I think all to do with this GBP 15 million because there's a GBP 15 million debt in there. Any new investment, GBP 15 million has got to go to the creditors part, it comes from shareholders or it comes from new investment, it starts to go in. That's why people are reluctant to do it. So why hasn't the Board gone? First, I don't care about what scheme 2 was. I don't care about what scheme 1 was, right? I care about what we need to do to make this move forward. And that the reasonable expectation of everybody, and I think all the shareholders would actually say, "All right, we're going to get hit with the 19:1 dilution, that's what we wanted." But all the other comps in it are down to what Nick told them originally in the scheme. We would raise GBP 15 million. It will be all right. It's what Gary told them to keep his GBP 600,000 salary. They were made up numbers, they never even existed. There were forecasted numbers, you've forecasted the numbers to get the scheme to approve. Now you need to go back and say, these aren't forecast anymore, these are real numbers. These are facts. We're not going to get the GBP 15 million and you should be going back for scheme #3. The FCA should openly be right? Because they're voiding you off the fine. They know there's an area in the market for you. It's proven that there is, okay? But we've already been diluted 19:1 and you've got evidence you can't raise the GBP 45 million. So what do they want? Like I said, this is the creditors are worth of, so the FCA is about as long as the creditors aren't worse off. The creditors group are going to say so long as we're not worse off. But all we're going to need to go, it couldn't be FCA. And if the FCA approved it, I mean you're just going to approve it as well. but you're not doing anybody any harm. You haven't got the GBP 15 million because right now, any day, you keep telling us, right, any day you could go straight back to fallback scheme. Well, that brings every shareholder, it ruins all the creditors and so on. So what I'm saying is, why doesn't somebody make a meeting with the FCA with everything on the table and say, we haven't got the GBP 15 million. It's very simple. And I'm sorry, Danny, GBP 350,000 a year, you should be doing it.

Whilst we still have investors that are potentially going to pay the whole amount, including the GBP 15 million...

Is that what one thing? Okay. you just told us on every -- you've just told us this morning, you've only got, what was it 10:50 scheme, you haven't got a 45. You've just told somebody else in the audience. You don't know how much they're going to raise some existing shareholders. So you haven't. You've got potentials. While you still got potential, you're talking [indiscernible] exactly like you've got scheme 2 passed upon hypotheticals, but 90% chance is you haven't got the money. So you should be going to the FCA and say, "Look at the staff Danny, we've spoken to 200 investors, right, and a handful, 2 or 3 have signed up. We don't expect to raise GBP 15 million from shareholders, right? But the FCA know this, that's why they let you off a GBP 70 million fine. So why on earth, it's nonsense we keep saying we don't know. You don't know, and that's the fact. You don't know. So I'm telling you, you should be going to the FCA with what you do know and you haven't got the money right now. You need to be open and honest to shareholders. You need to open and honest to the FCA. Stop kicking the ball down the road. It's getting annoying for every shareholder, right? And you want GBP 350,000 a year. I want to know why you're on twice as much as a Prime Minister, but you can't act and you can't go to the FCA?

We have clear instructions from the court and the FCA that whilst the GBP 45 million is viable, which we currently still believe it is based on discussions with potential investors currently that we should not try anything else. We should not try to change it. If -- sorry, bear with me, Daniel. If those conversations fall down, then we are open to approaching the FCA and having those conversations. But they will not welcome those conversations whilst potential of raising the full amount is still there.

And to be clear, conversation with the FCA, this is a court-approved scheme. We would have to go through a legal process and the decision is actually in the hands of the creditors whether they accept a new scheme or not. So it's not a case of having a conversation with the FCA. This is a very difficult and complex legal process should you look to choose.

Well, I don't believe it, you've had months before and you knew what was going to happen months ago. You guys came up with this original 2.0 scheme. So Danny you knew what was up against in the first place or you shouldn't do for that's sort of money. The point is, yes, you would need creditors' approval. We know that, okay? But if the FCA was to say, actually, yes, you've shown you haven't got the GBP 15 million, correct? You've shown that the creditors aren't worse off, they would be going -- it'd be going to the creditors group, which, let's be honest, you know them all now because they've all got reinvest claims in. So it's easier for you to contact them now than it was before, a lot easier, okay? And you can be going to the judge, quite easily with the FCA helping you, right, how is the creditors group. And there's no way a judge if you're going to go against the creditors group and the FCA. I mean that's not going to happen in anyway. So it's a lot easier than it was before.

It depends on many things. The creditors may well accept it. But if the FCA object to it again as they did to the first scheme, then the creditors and the judge may not accept it.

Right. So let me get my timeline right, then. Okay. you've got domain [indiscernible] funding out, okay? Now you're telling me if may doesn't happen, don't worry, we're not going to go back into fallback scheme, like we've told you every day straightaway. We're going to go back to FCA and we're going to negotiate with them again because they've told us that they don't want to hear from us until we've exhausted all options on GBP 45 million. That's what you've just said. Well, then there you on and RNS telling us you're going to immediately go to the fallback scheme without talking to the FCA. So which one is it?

It's -- you're picking and choosing the words. The Board have -- bear with me -- Daniel, bear with me, let me answer the question. The Board have to decide whether anything is viable. The Board in that decision will look at whether any investors are potentially going to raise the full GBP 45 million as we are having discussions at the moment. The Board will also have to decide if that is not possible, can we raise a lesser amount and go back for the scheme. So timeline would always be tight on that, but we have no choice in the matter in terms of the order of the process. But that is the order of things. It wouldn't be a case of it would automatically fall over overnight, the Board would have to make that decision about how long we can reasonably give this in trying to get to that point.

The other thing I'd like to...

That's what we need to do as shareholders. We need to not do the doom and gloom all the time. We need to hear a positive that you've got options 1, 2, 3, 4, because we all want this. We've been in a long, long time. We all want this to survive. You've got shareholders in the room and on the call because they want it to survive. They want their investment to grow, okay? So please stop saying that we're just going to go back to fallback scheme and you're all going to be wiped out. We've been hurt enough. We need you, that's what we're paying for, to be said, but hang on, we are working on multiple options. We're actively seeking options, not just this GBP 45 million, which is an absolutely nonsense, right? We go into the FCA with facts and figures. We're already looking at maybe doing a presentation, just in case with the creditors group and the FCA. I will be ready then you're going to speeding things up. I don't see why you can't go to the FCA saying, look, you know the outcome. You probably listening to this call right great. Send them now a little note to say, look, you can see how passionate the shareholders are. You can see they want this to survive, right? We're not saying we're going to go down this route. We say we're actively trying to raise the GBP 45 million. That's what we've been told to do. But please, can we just have a look at this just in case because we don't want to get to a stage. We're 2 months down the line and then coming to right? So why can't you say them now just say, "Look, what are your thoughts on this? Just peruse it. You don't have to give us an answer, right?" Because we are actively looking at this GBP 45 million. If we ever do that quite easily.

We'll take that point away, Daniel. And I'm happy to talk to you offline about it as well.

Right? I don't like the offline thing because I think all shareholders, all [ 8,000 ] of them should know what's going. I'm so annoyed, you can't imagine.

Daniel, you should know as well not surprise me, there is regular you'd expect, and you're rightly asking the question about dialogue with the regulator. We are in touch with the regulator, I think looking at the group weekly. So please -- and we can't always communicate that, but please don't think that they don't know where we're at or what our thinking is.

Listen, I know they do, right? Trust me, I know they do, but that's why I don't know why you haven't said to them, we can't raise the GBP 15 million. But we thought we could. That's why we put this team together and you approved it and sanctioned it, but the FCA, I'm sorry to say, has an obligation here themselves because they pushed you, they pushed the shareholders, they pushed you to come up with the second scheme, right, which wasn't a feasible scheme. They didn't agree with the first one, they thought you got on in the part. So you went in with the second one, right? And all intents and purposes you might have thought you got the money, right? But you didn't, right? So they're obligated just like you because they rejected the first scheme, so did the judge, right, trying to push the normally right -- so to be honest, we've got an obligation to at least look at scheme #3 because scheme #2 isn't not because of your problems is because they took so long to go return to lending. They took so long about talking about the fine, right? And nobody knew what was happening and the share price is absolutely tight and we basically enter a recession. So they do have -- and they've got to have open dialogue about the possible scheme 3, right? Do you know what I mean, it's not just Amigo's fault, you kind of -- you've stuck to what you've said, but market forces have created the situation you're in. And it was the FCA that pushed originally the scheme 2. And it just isn't feasible. So just go back to them and say, we now accept 19:1, we'll still accept the creditors they're going to get hurt like us in the creditors are still going to probably get an extra couple thing in the pound, right? But we just can't raise the GBP 15 million that's stopping us from the shareholders' money because then whatever you do in the dilution, it goes towards what you need for future business and future lending, right? And it helps any new investors. They're not talking about the GBP 15 million debt anymore. And then you have a viable business proposition. It's still that we've been talking about it for weeks and months, right? That's what I am trying to say, I am just saying open the door with the FCA. Don't wait for them to talk to you or wait for the last minute. Go to them now and say, this is the situation we're in. They know it. We're waiting for you to speak to them about it, right? But the longer you wait, it is just running out with time and thing, right? And then it at least shows the shareholders that you try -- all we want to see is that you're actively trying. I know you can say you are, but we need to see it.

I think, Daniel, you have to imagine that we are doing everything that we can think of to deal with this very difficult situation. The FCA are very difficult about statements about themselves. But that is what we are doing. But I can't tell you anything more than that. We hear you very loudly and very clearly. We also fully understand our own duties to do to find our way out of this hole, but I would like to...

[Technical Difficulty]

Hello? Can I...

GBP 15 million [Technical Difficulty]

I can't hear you, Daniel, sorry.

I think I've gone, my signal is gone.

You are back. You are back.

I was just saying you must have made GBP 15 million. And as you could go to -- you could take your advisers to the FCA. It's the GBP 15 million that's killing you, it's killing you with current shareholders, it's killing you with your future lending, everything, right? And you'd be your advisers, you financial advisers have gone to market would be telling you if we went to market without a GBP 15 million debt or shares or whatever nonsense you come up with the GBP 15 million, right? The point is it's hindering your ability to raise the GBP 45 million. But you don't need to raise GBP 45 million anymore. If you got rid of GBP 15 million, you would only need to raise GBP 30 million. You got -- you've already said you got [GBP 10 million] So you're actually only needing to raise GBP 20 million. It's a no brainer. The business survives.

Daniel, we acutely understand everything you are observing and share that. And it's part of our, if you like, part of our thinking without any commitment to [indiscernible] so we welcome. So we're not trying to do everything that you -- sorry we are trying do everything that you are thinking about and wishing for. But we can't make public announcements about we've done this, we've done that. We've done the other because of sensitivities. But we are very much on the case of trying to work our way and come up with a solution.

With that, any other?

We have any other questions? Anybody else in the room would like to ask more?

Hello, can you hear me?

Hello? Yes.

Yes. Just a question when we talk about timelines, and I think you mentioned something like 14 days. Is that business days because obviously, I'm conscious we're approaching a period where we are having most -- a lot of bank holidays and just that's going to impact on -- we're 11 weeks away, but when you factor those in, you're losing a business week?

The rules normally talk about 10 business days, which we've shorthanded to 2 weeks, including the weekend. But you're right, we're also aware of Easter May bank holiday, et cetera, et cetera, et cetera, that will take days away from us unhopefully.

Okay. And then just a quick final point and just a simple number. Are management considering their positions post any successful raise. I mean, I ask because I appreciate market conditions, et cetera. have impacted the potential, as Daniel was alluding to, the frustration is probably felt, but I feel some fault has to potentially be accepted by the Board. So just wondered if that's a consideration post any raise going forward?

Well, I mean, very short term, as Maria said, we have all agreed to take cuts. Well, the nonexecutive Board thinks to take cuts in their pay.

I mean not pay, sorry, I mean just confidence to run this business moving forward, given how sort of performance has been from management. I personally don't feel confident that the people there right now could make Amigo successful should I invest any money in a potential raise. Do I feel you are the right people to get me a better return on that, not at the moment? So just that question there.

Well, I mean, all I can tell you is...

I believe in the business, just not in the management.

Yes. We have a completely new suite of executives. You've got Danny and Kerry who are Board members, but you've got a whole of ex-co who actually have their hands on the tiller day-to-day are new. And if I'm honest about it, we've got a better set of people running the business in a way the business deserves. Now that's a slightly curious thing to say. But we have very high quality people working hard to make the best of what we've got. So it's not down to Danny and Kerry. There's a whole team of people that are putting their shoulders to the wheel to make this happen. It's -- it will be -- I can't -- life will evolve as it evolves. But I don't have any loss of confidence at all in terms of the ability of the whole team to make the best of what we've got. Hello?

Can you hear me?

Yes.

Good. With reference to the previous person and his comments, I think it's important as a shareholder to make it clear that I do recognize the quality of the people sitting in front of me on the screen here, who were not responsible for getting the company in the position that it's in currently and clearly all have an exceptional track record or success in this type of industry. I have no doubt at all that you're aware of your reputations and would not be involved with Amigo were it not for the fact that you believe in the business and your ability to make it a successful company going forward, you wouldn't want to risk all the good work that you've done in building good reputations over many years past only to see this business fail. So it's certainly as far as I'm concerned and several people who I'm aware of for the shareholders in the company, you have our confidence going forward, both as the executive board and in the business itself.

Thank you for that. I wholeheartedly share that view.

Good. If I could just ask 1 other thing that occurs to me. Is it possible that the scheme and the capital raises are being slightly confused. I understand the reason for it. But nevertheless, it occurs to me that where you have, albeit nonbinding commitments for I think you said GBP 25 million, up to GBP 25 million of underwriting. It's not the money. It's the underwriting. But that is more than sufficient to satisfy the requirements of the scheme of arrangement, which requires GBP 15 million to be raised failing which the wind-down auction would come to the fore and circumstances were in excess of GBP 15 million is available to be raised, would it not be possibly more sensible to do whatever is necessary in order to establish the fact that the company has met its obligations under the terms of the [SRA] and is now a viable business that needs to raise further capital going forward rather than being a business that might need to go into wind down anyway?

The -- the issue for me and for all shareholders is if we were to raise GBP 15 million, give it to the scheme creditors, we have nothing left in the tin to run the business and that may be not true in the next fortnight, but we would not be a going concern because we need the other money to run the business, the working capital to pay for the inevitable J curve of losses as the new business takes hold. So you would be putting or I would be putting my own money into a situation, which can't be sustained. And I've said before that that's not a situation that I would recommend to anybody. I know it feels a seductive way out. But you could find -- we could find ourselves putting GBP 15 million in and then 3 months later, we can't raise the other money and we have to shut it in. That's not a clever place to head to.

Right. Okay.

But I understand what you say. I mean don't get me wrong, it's not something that we've not thought about, but it's just -- you -- it's difficult in the public markets to raise money on the DRIP. And because we don't have a big [indiscernible] back who can do that, we have to go in for big [bullocks] and we then have the prospectus rules on working capital, which has an 18-month run and there's all kinds of things which follow that. So you put yourself at immense peril if you solve the problem for the next 3 months and then you still can't raise the money because you wasted GBP 15 million.

It is just the case of getting beyond stage where the fallback becomes mandatory. If the GBP 15 million can't be raised. It's -- this confluence of the SOA requirements to raise GBP 15 million by May 26. If it can't be raised, then fallback occurs, but if GBP 15 million is raised, then the equation that says that fallback must occur is taken off the table. And that being the case, I would think that there would be greater positivity as far as attitude of potential investors or lenders or whatever would be concerned to put the money into the business that it needs going forward.

But there, you've hit on one of the other key elements in that we can only raise debt if there's an equity buffer in front of the debt. So the term sheets we have for debt wouldn't be there in the GBP 15 million, if we did a naked GBP 15 million raise, given over to the scheme creditors, they say, well, they're not going to lend any money in that situation. So it's a package that needs to be presented to them.

And the people who have indicated that they might be able to put in the GBP 10 million to GBP 15 million wouldn't want that money going straight out to creditors and nothing going into the business.

Yes, that's a fair point. But we have thought about it and not kind of casually dismissed it, but it doesn't -- we can't get it to work.

Going back to the comments that were quite forcefully made by, Danny, any earlier, it could potentially be the case. So this is me thinking on my feet, it could potentially be the case that a discussion could take place on the basis that the scheme based on the current situation, what you know currently should have been that GBP 45 million has to be raised in order for the scheme to go ahead rather than GBP 15 million and its market conditions, and it's the part else the considerable reduction in the share price from where it was at the time of SOA1 at 30p down to the current share price of 2.5p that isn't helping the situation. We're in a recession. There are more people that need Amigo today than ever. It's in everybody's best interest, the creditors and the FCA and the government to see this company survive and be available to serve the needs of the people that can't borrow from mainstream banks. And I would think that there should be an understanding from the point of view of the FCA and the high court to dealing with the situation as it is today.

Yes, I agree that's what they should do, how susceptible they are to that, I don't know. The court will be entirely focused on looking after scheme creditors because it's an [indiscernible] situation. The FCA does have obligations for competition and showing a good market out there, but it has very few tools to make that happen and it's kind of -- we've seen out in the marketplace a succession of higher APR lenders kind of faltering, faltering for their own frailties for bad practices in the past. So the landscape -- competitive landscape looking forward for ourselves is very open, but we have the new challenges of doing affordability really properly, which I don't think any of our competitors are really facing into at the moment. So we've got the new consumer duty of care, which I'm worried about vis-à-vis what might happen with claims management companies and the rest of it because the FCA, whilst they regulate them, not all of them, there are not necessarily do the same thing. They have not shown a lot of ability to control them. So there's a few worries out there that I carry with me today about the long-term future. More openly, we more than 100% believe there's a need in the market for products like reward rate, which I struggle to say. And there's a big pent-up demand. But at the moment, our potential customers are on a slippery slope of inflation from all known angles. So when you look carefully at their affordability that becomes harder because they are looking at rising costs. So at the moment, those rising costs aren't being matched by increases in salary. Now that will invert at some point, now it will catch up. But that's one of the difficulties we are facing. Our central customers do not have much resilience to shocks and downturns and those things. And that is a sorry state that the whole country is in. That's the majority of the population. It's not an isolated pocket we're aiming at. The number of people -- there was a report from KPMG, which said that 28 million rather than the normally quoted 15 million people were in real difficulty, and we are sensing that from the early doors responses. There's lots of demand, but we can't fill in the demand because we -- the affordability doesn't work. It doesn't work today. We expect it to work. But today, it's difficult.

Sure. But we're talking about a business that needs to be there for people today and in a year's time. And with the APR that is now being offered by RewardRate is competitive in the context of credit unions many credit unions and far more competitive than the rates offered by CDFIs in many instances. Both of those organizations are perceived as being the kind of organizations that the government and the FCA would like to see available to help people. It's more important than ever once again to see Amigo there available to the people that need it.

Look, we 100% agree with that. Government has not so much enthusiasm for putting its hand in the pocket to help that money be lent out. But they go, "Oh, yes, we agree with you," but then nothing happens.

Yes. Our conversations ongoing with government at any level as far as that is concerned?

Not actively. We have -- Nick does most of our kind of governmental relations. But they are in the trenches with no money to spend on gas and electricity for the population, that's where they're putting their pennies at the moment. And in a way, rightly so because people will die if they can't heat their homes. So you -- the problem with government is it moves incredibly slowly, and you have a few gain sales on the labor ventures just to celebrate the rest of it. On a 5-year view, they may get it, but they're not currently getting it and they're not doing -- currently doing anything about it.

Okay. Well, I wish you the very best of luck in the continuing discussions that you're having, undoubtedly having with people that are viewing Amigo through the same eyes as myself as many as other shareholders who are prepared to wait and support the company on an ongoing basis in the belief that it has a very good future.

Thank you for that.

We appreciate that.

We share that belief. Any more questions from the Zoom is fair.

Yes, there's one [indiscernible]

Yes. Okay. Ned?

Yes. What's the timing of the bond repay?

This month. Anymore questions?

Hello?

Hello? Philip?

Yes, just to echo the previous comments, I think there's a massive demand for Amigo business going forward. And it could be very, very profitable. So I'm surprised that you haven't been able to find the investment you need. I'm just wondering what are the reasons for that? And what can be done to change it? So we can't find that investment.

At a very, very high level. We have run into incredibly difficult economic conditions out there, which we've just -- we've just touched on. So for our customers, our potential customers are much more exposed to the vagaries of inflation and energy, et cetera. So there's a concern about the current near-term customer base and our ability to access it. And we are indeed finding that. We've got lots of people who want the loans, but we cannot get the affordability equation to work for them that will change -- there -- that -- even in spite of the fact that the FTSE is at an all-time high, but that's mostly kind of oil and gas and minerals and a few banks trying that. If you look at the U.K. mid-cost, higher-cost lending sector, it's flat on its back. So if you were investing in the sector, you would think line, that's not been good. And then there is a concern that we have a regulatory environment, which is changing, changing with the consumer duty of care in a way that we can't 100% predict. So you've got those 3 elements nagging at investors. And they will all say, "Well, I'll see how it looks in a year's time or something like that. And that doesn't help us because in 3 months' time or 2 months' time. So that's the territory we're looking at. And we have, as Danny said, looked at there have been 4 sets of advisers out there fishing in different ponds. You can't -- yes, the traditional long-only investor, the likes of Schroders and Aberdeen Asset Management have drawn their homes in and away from the what you'd normally see for a normal company were not normal to underwrite a rights issue. You then go to the private equity houses who either we are put off by the accounting economic environment or too big, long jurisdiction or we don't do financial services, the whole slew. So that's the pool is in principle immense, we're dealing in a relatively minor puddle of it. And you then got the harder-to-reach family offices, which all have been explored in a way you can never end with that. You can always say all about this one, all about that one. But a good troll has been won with one of our advisers in that particular bit of space. So if I was to say to you there's nobody on the planet who will invest. That will be inaccurate. It's been well advertised as an opportunity for the PE houses. We will spot it and a respectively good troll of the difficult-to-reach family offices has been done as well. So I'm kind of rambled with that. I don't know whether that answers your short question.

No, no, that's fair enough. So I think again, this is thinking from earlier comments, if -- I know I appreciate the conversations are ongoing. But if it looks like you aren't going to get the money, it sounds like you've probably only got maybe a few weeks left at the most before you then have to say, right, we can't do it. And then you go back to the FCA and try and change the deal somehow or I don't know, is that going to be the next step? And if so, you then got what another week or 2 to get something amended if at all, and then the company will wind down possibly, is that what we're looking at?

Let me answer the question slightly differently. We are leaving no stone unturned in terms of trying to find a solution. Time is not on our side. If we have to amend the scheme, that takes weeks, not days. And it's not in the gift of the FCA. The FCA's gift is to say, "Oh, we don't like it and oppose." But the FCA -- which will be fatal, but we have to go to the court and the judge to do that. And that's quite a long-winded process. We are not -- we're very close to not that being timed out, but we're not quite there yet. But -- so time is of the essence, all I can say, but no stone unturned. Any more questions?

Yes, we have one question [indiscernible]

Can you hear me?

Yes, who are you?

My name is Suresh, and I'm just a little bit like not enough shareholder. So I just want to ask you like for you're looking as an investor, what percentage like the big company like a JPMorgan or something they're trying to work with you?

No. We've got Peel Hunt who are more of a traditional brokerage house doing IPOs on the main markets, but they also have a specialty of raising money from private equity. We've got [indiscernible] who are also private equity focused but more with a bent at debt. We have had PwC looking at private wealth providers from around the globe, I would add. And we've had another specialist investment adviser who has a particular angle on a few investors, not JPMorgan on this case. Any more questions? Do you want to wait a couple of minutes? Anybody in the room would like to have answer -- have any more questions posed and possibly answered, if you're lucky? No. Another 30 seconds for people to put their hands up.

[indiscernible]

Right. I'll give you 30 seconds, and we can sing the National Anthem or whatever you fancy.

[indiscernible]

Sorry, yes. Hello, yes?

Hello? Can you hear me?

Yes.

Excellent. I was unmuted by you guys there. Apologies. I'm a late attendant to this discussion. So if this question has already been asked, obviously, just give me short shrift. But I like something clear about the ownership of shares. If you're going to a wind-down situation, can you categorically answer, please, whether our shares return value with reward rate, however, the situation unfolds after the wind down or are we totally dead in the water?

It's the latter, I'm afraid. Anymore questions. Thank you very much indeed for your time today, and thank you for the engagement of the care and the interest. We're very grateful to everybody. We are trying everything we can think of, no stone unturned to solve this problem. And I know it's testing your collective patience. But unless anybody has anything else to say, I should now like to formally close the meeting. Thank you.