THE boss of Amigo Loans has said the business deserves a chance to correct the mistakes of the past as it prepares for a court case which could decide its survival.

The lender – which employs around 200 people at its Bournemouth base – will go to the High Court on March 8 to seek approval for a scheme that would limit payouts to customers who have complained of mis-selling.

Chief executive Gary Jennison – who has led a new top team in an effort to work up a plan for the business – said the prospects of success depended on the Financial Conduct Authority. It objected to an earlier scheme which was thrown out by the High Court last year.

“It depends on the regulator’s position and we don’t know what their position is going to be,” he told the Daily Echo.”

He said many hard-pressed households needed access to credit – and that more were falling into the hands of illegal lenders.

“Amigo deserves a second chance to prove we can get it right this time and correct the errors of the past,” he added.

Under its New Business Scheme, Amigo plans to plough £97m into the business, plus £15m from a new equity and capital raise. That is likely to mean a issuing 19 new shares for every existing one, massively diluting current investors’ stake in the business.

Creditors are being asked to endorse the New Business Scheme as well as an alternative scheme which would see the business wound down if the court does not approve the preferred option.

Amigo revealed yesterday that pre-tax profit rose to £1.6million in the nine months to December 31 after a loss of £81.3m in the same period the previous year.

The company stopped lending during the pandemic and saw revenue reduce by 44.9 per cent to £75.7m in the nine-month period, compared with 2020.

With loan payments still being collected but no new lending taking place, the size of Amigo’s loan book reduced 56.2 per cent to £180.7m , from £412.2m in the same nine months of 2020.

Announcing the results, Mr Jennison said: “Amigo is committed to addressing liabilities that have arisen from historic lending practices under previous management. This Amigo board recognises that shareholders have suffered greatly as a result. However, we are resolute in our determination to deliver the maximum value possible to redress creditors.

“As we head into a cost-of-living crisis for many households, with inflation at a 30-year high and forecast to move higher, the market needs a product that can service the needs of customers in the non-standard sector. With flexible products that incorporate incentives, we can help customers through difficult times and on towards mainstream financial inclusion. I would like to thank all our employees who continue to support our business during this uncertain period and who share our vision for the future.

“If we can secure the New Business Scheme and return to lending, then I am confident we can move forward with a new business model that meets strong demand in the market. Amigo has the management expertise and is building the infrastructure, policies and procedures required to be a responsible and valuable contributor to the non-standard finance space.”