December 9, 2019 / 7:44 AM / 2 months ago

Amigo CEO and chairman say 'adios' as founder makes boardroom comeback

LONDON (Reuters) - Amigo’s (AMGO.L) chief executive and chairman abruptly announced plans to step down on Monday, just as the British subprime lender’s founder said he was returning to its board.

James Benamor’s Richmond Group, Amigo’s biggest investor with a 60.6% stake, has pressed ahead with plans to appoint two board members, after speculation it is vulnerable to a takeover.

Amigo said Benamor, who founded the firm in 2005, was becoming a non-independent and non-executive director, while Kelly Black, who heads Richmond’s Measurement & Improvement division, will also join its board.

The Bournemouth-based company, which issues loans that a borrower’s family or friends can guarantee, said that Hamish Paton is stepping down less than five months after he was promoted to the role of CEO from chief commercial officer.

And its chairman will not seek a new mandate at Amigo’s annual general meeting in 2020.

“In the light of the RGL director appointment ... Stephan Wilcke has concluded that it is more appropriate for the company to be chaired by a new chairman,” Amigo said in a statement.

Clare Salmon, who chairs Amigo’s remuneration committee, will leave “for corresponding reasons”, Amigo said, adding that this would happen at the “first suitable opportunity”.

Amigo’s shares were up 8.9% at 66 pence at 1134 GMT.

“Benamor is clearly unhappy with the share price performance in recent months and feels he needs to take more control,” Goodbody analyst John Cronin said.

“While there has been some speculation that this could be a prelude to a takeover by Richmond ... we categorically do not believe that this is on the agenda for now,” Cronin added.

Black’s appointment will take effect no later than May 28, 2020 once Amigo has recruited an additional independent non-executive director in order to maintain the board balance.

Amigo said Paton will remain subject to his 12 month notice period in order to ensure an orderly transition to a new CEO.

ENTREPRENEUR

Amigo’s shares more than halved to a record low in late August when it reported a rise in first-quarter impairments and costs and warned of slower annual growth in its loan book.

The business - which specialises in loans of up to 10,000 pounds to borrowers with weak credit histories - faces a tough economic outlook and growing regulatory scrutiny.

Amigo’s market value has dropped to 288 million pounds ($370 million) since last year when it listed in London in a deal that valued it at 1.3 billion pounds, raising almost 330 million pounds for Benamor and other managers.

42-year-old entrepreneur Benamor ran Amigo for a decade before appointing a new boss in 2015. His net worth exceeded 1.1 billion pounds after the business went public in 2018.

Benamor set up Richmond at the age of 21 when, unable to pay for advertising, he walked 300 kilometres and delivered 30,000 leaflets door-to-door in the first month of the business.

Reporting by Pamela Barbaglia, editing by Louise Heavens and Alexander Smith

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