AMIGO has submitted a plan to save the business and its 220 Bournemouth jobs.

An independent committee of customers has backed the scheme over an alternative plan for a “managed wind-down” of the loan company.

Amigo has not been lending for more than a year while it worked on proposals to limit compensation to people who complained of mis-selling. A previous proposal was rejected by the High Court in May.

Shares in the business – which were worth almost £3 each at one point in 2018 – fell to 6.20 pence yesterday after Amigo said the plan to be put before creditors involved raising equity and capital to enable new lending.

Amigo chief executive Gary Jennison said: “We are pleased that the Independent Customer Committee has confirmed its preference for our New Business Scheme and that we can now take the next step to achieve a way forward for Amigo’s creditors and other stakeholders.

“We have listened carefully to its views over a number of months, alongside addressing the concerns raised by the High Court and the regulator last May, and I would like to thank its members for the considerable time and commitment they have shown in helping us seek a fair outcome for all creditors.

“We modelled our first Scheme proposal based upon forecasts of a severe impact from Covid-19 upon our business. In the event, Amigo’s trading performance in terms of collections and impairments has been better than expected throughout 2021 and the size of the loan book has roughly halved in that time with a further 12 months’ worth of collections.

“Therefore, although the business remains insolvent, Amigo is in a position where it can contribute a significantly higher sum to those creditors due redress should we be able to secure their support, the approval of the court and then subsequently complete a successful equity raise. This is a complex process which, given our financial position, provides no perfect path for either creditors or existing shareholders but we are an important step closer today to addressing the historic lending issues we face.”

Creditors will be asked to vote on the new business scheme, which depends on the firm lending again, as well as the alternative “wind-down scheme”.

Amigo proposes raising £97million from internally generated resources, along with £15m which will be part of the proceeds from a new equity and capital raise.

A letter explaining both schemes will be sent to the Financial Conduct Authority for review, which could result in changes to the proposal.

Amigo has agreed with the customer committee that total net new lending under the new business scheme will not be more than £35m until conditions have been met and £112m has been paid into the scheme fund to compensate complainants.