The future might finally be looking brighter for Amigo Loans shareholders after years of dramatic decline and failed rescue attempts. The controversial guarantor lender, once valued at £1.5 billion, is now attempting an extraordinary transformation from financial services to gold mining under new Australian leadership.
From Blue Plasticine to Billions: The Rise and Fall
Amigo Loans began its journey in 2005 as a subprime guarantor lender, rapidly building its customer base with the help of memorable television advertisements featuring distinctive blue plasticine figures. The company achieved a significant milestone in 2018 when it listed on the London Stock Exchange, initially enjoying substantial success that saw its market capitalisation peak at an impressive £1.5 billion.
However, storm clouds gathered quickly around the business. Questions about Amigo's governance processes emerged from the moment of its initial public offering, with regulators soon launching investigations into lending practices that charged customers interest rates as high as 50 per cent. The situation deteriorated further when a bitter feud erupted between the company's board and its flamboyant founder, James Benamor.
Benamor adopted an aggressive strategy, threatening to sell one per cent of his stake daily until the board was replaced. When directors refused to yield, Benamor followed through on his threat. By 2020, the company's stock had collapsed by more than 80 per cent, with Bloomberg describing it as a "new contender" for "London's worst IPO award."
Regulatory Crisis and Failed Reinventions
The company's troubles deepened when the Financial Conduct Authority investigation revealed that Amigo had "failed to assess properly the affordability of its lending, especially to vulnerable consumers." In 2023, the regulator announced Amigo faced a £73 million fine, though the company's financial state was so precarious that paying it seemed unlikely.
Attempts to raise fresh capital for continued lending operations failed due to limited investor interest, forcing Amigo to begin winding down operations. With shares virtually worthless, remaining staff experimented with various reinvention strategies. At one point, the company discussed transforming into a music and film streaming service to create "some small value" for shareholders - a plan that ultimately came to nothing.
The company then brought in Scottish turnaround specialist Jim McColl, who had previously transformed Clyde Blowers from a small London-listed business into a multinational corporation with £1.3 billion in revenue. Unfortunately, McColl couldn't work his magic on Amigo's fortunes.
Australian Rescue: Mining for Gold in Tanzania
The latest rescue attempt comes from Australian mining executive Craig Ransley, who believes he can extract value from Amigo's shell by transforming it into a mining company. Ransley has identified two gold and rare earth opportunities in Tanzania that he's spent twelve months evaluating.
"It's probably the most friendly jurisdiction in Africa to work in," Ransley explained. "I've got very strong relationships on the continent from the top level down, and Tanzania is a very good environment to work in - it's safe, it's respected and the money goes in and out of the country easily from an exchange perspective."
Ransley brings mining expertise but also regulatory experience of a different kind. He previously served as a director of Australian mining firm TerraCom, where he was one of four directors named in a probe by financial regulator ASIC after whistleblower concerns about manipulated coal quality test results. In May, TerraCom agreed to pay a $7.5 million fine for one admitted contravention of the Corporations Act plus $1 million for ASIC's legal costs.
For Amigo's transformation, Ransley has already secured £1.5 million from investors and insists he'll "bring back some serious institutions to the register" once "everything I've got in my bag of tricks will come into fruition."
When asked why he chose to adopt a shell listing rather than floating a new company, Ransley explained: "It's faster than going through the front door - and the ease of getting funds when we're in the market that we're in, especially with gold and rare earths, maybe it's twice as fast."
As for why he specifically selected Amigo? "Because Amigo means mate, right...and being an Aussie, mate, 'mate' is a good word." For shareholders holding stock currently valued at just 0.3p, they'll be hoping this Australian mate can indeed dig up the golden future he's promising.
