Amigo Shares Are Down 27% YTD. What Can We Expect in 2023?

The Amigo Holdings PLC (LON: AMGO) share price has fallen 27.4% this year, and many are wondering what comes next for the guarantor loans company as we enter a new year in just over a week.

First and foremost, Amigo has to conduct a massive capital raise by issuing 19 new shares for every existing share, which will significantly dilute existing shareholders but is a crucial requirement under the scheme of arrangement approved by the High Court.

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Secondly, the lender has to complete the pilot lending program launched through its new leading platform, RedardRate. Completing the pilot program will allow the company to launch its fully-fledged lending activities with the FCA’s approval. 

In its last news release, Amigo said it was in talks with some of its institutional backers regarding the capital raise and would announce it once it has agreed on a way forward with the lead investors.

As I have previously mentioned, demand for Amigo’s guarantor loans is relatively high due to the impact of the pandemic, which saw many people lose their jobs and income sources, causing many to default on their existing loans. 

The demise of other guarantor lenders in the past two years has left many people without access to loans, given that they may not qualify for loans from traditional sources, including banks and building societies. 

Amigo’s new lending terms are very transparent, a crucial feature mandated by the High Court and the FCA, given the previous complaints against the company as customers accused it of opaque lending terms that made them pay more than they had budgeted. 

The stage is set for Amigo to start the new year on a high note as it completes the mandatory fundraising and the pilot lending phase to resume full lending activities. As investors, it might be best to wait for the lender to complete the fundraising before buying to avoid the massive dilution. 

2023 promises to be an exciting year for Amigo Loans, and I can’t wait to update you on the firm’s progress. 

*This is not investment advice. 

Amigo share price.

The Amigo share price is down 27.44% as the year ends. What can we expect next year?