Sub-prime lender Amigo given lifeline by UK court

LONDON (Reuters) – British sub-prime lender Amigo has been granted court approval to pay compensation to past customers mis-sold loans and a chance to stay in business and resume lending, the company said on Monday.

Amigo has been fighting for its life in the courts for more than a year after a deluge of customer claims.

The company said it would now seek regulatory permission to resume lending and raise fresh capital.

A previous rescue scheme was rejected by the courts after the Financial Conduct Authority raised objections, saying the plan short-changed claimaints.

The newly-approved scheme will result in claimants being paid a higher proportion of the value of their claims.

The FCA said on Monday that it noted the High Court’s approval and said the scheme was an improvement.

“We will continue to monitor Amigo closely as it launches the scheme and seeks to meet the conditions for it to resume lending.  Our investigation into the firm is ongoing,” the FCA added.

Amigo’s shares were suspended temporarily on Monday pending the outcome of the court hearing.

(Reporting by Iain Withers; Editing by David Goodman)