THE boss of the lender Amigo has pleaded with shareholders to back a plan to save the business or face ending up with nothing.

The company – which has around 200 staff at its Bournemouth HQ – needs approval for a scheme which would massively dilute the value of shareholders’ stake in the company by issuing new shares.

It says the plan is its only hope of winning High Court support for a scheme that would save the business by limiting payouts to customers who have complained of mis-selling.

Earlier this week, Amigo revealed plans to raise new money through a rights issue which would create 19 new shares for every existing share.

The company announced on Monday that its chief financial officer, Mike Corcoran, was standing down.

Shares, which hit a high of more than £2.97 in 2019, were worth 2.21 pence at the close of trading yesterday.

In an open letter to shareholders, chief executive Gary Jennison said it was “critical to the survival of the business” that its new scheme of arrangement won approval from the court. A previous proposal was rejected in in May last year when the court decided Amigo’s proposals unfairly protected shareholder value at the expense of customers with mis-selling claims.

Mr Jennison wrote: “As you know, we, as a board and management team, joined Amigo to fix the issues that have arisen from the historical lending practices which took place under previous management.

“When we joined the extent of the problems were not clear. We are now very clear about what we need to do to push this business forward, which is to deliver as much value as we can to creditors and demonstrate to the court and Financial Conduct Authority that we are doing so.

“I know that this is very difficult for our shareholders but it is imperative for the business that the New Business Scheme is sanctioned. Without it, Amigo Loans Ltd will be wound down or enter into administration. In either of these situations, shareholders will receive nothing in respect of Amigo Loans Ltd.”

The equity raise would contribute £15m towards dealing with complaints as well as funding new business.

Mr Jennison said the proposals would enable Amigo to address its liabilities and move forward with a new business model.

The business was founded on providing loans at 49.9 per cent annual percentage rate to customers who would find a friend or relative to act as a guarantor.

But if the business can be rescued, it intends to introduce new initiatives such as loans without a guarantor and loans where interest rates come down for good payers.