The controversial boss of high interest lender Amigo Loans is set to bag millions as his company hits the stock market next week.
Amigo, which lends to individuals with a bad credit history at an average interest rate of 50 per cent, announced yesterday that it would list at a price of 275p per share.
This will give the business a market value of £1.3 billion, bagging founder James Benamor and other senior managers at the business £326.8m between them.
Benamor has proved a divisive figure, even in the world of high-interest loans. He has previously said: ‘When I was younger I got into quite a lot of trouble. I was taking a lot of drugs. I was basically a petty criminal.’
He was also accused ten years ago of running a ‘scam’ through his business Richmond Group, which involved getting customers to pay a £50 brokerage fee in the hope they would be given a loan. Many were just given the phone numbers of other banks, but Benamor denied misleading clients.
The entrepreneur will be hoping his latest venture attracts less criticism. It has already been backed by fund manager Neil Woodford and Invesco’s Mark Barnett.
Chief executive Glen Crawford said: ‘We are delighted with the level of support and interest we have received from our new investors.’
Another lender also set the price range for its float yesterday. ASA International, which provides ‘microfinance’ to low-income female entrepreneurs in Asia and Africa, said it would list at between 285p and 340p per share, giving it a value of £285m to £340m.
In a busy day for new listings, law firm Knights began trading. The firm, the most valuable of its kind to float in the UK so far, saw shares climb 20.7 per cent from 145p to 175p. However, lawyers were providing a spot of bother for Daily Mirror newspaper owner Reach.
It said that it was having to set aside a further £7.5m to cover higher-than-expected costs it owed to claimants’ legal teams in phone hacking cases.
Reach, which acquired the Daily Express and Star newspapers in February, said it expected revenue to be up by 11 per cent in the first half of its financial year as a result of the acquisition. On a like-for-like basis, revenue would have fell 7 per cent.
Chief executive Simon Fox said the group had ‘seen some improvement in May and June driven by stronger national print advertising’, and would begin to integrate its new titles to benefit from increased scale. The newspaper publisher’s shares climbed 0.66 per cent, or 0.5p, to 76.5p during the day.
But a new acquisition at chemicals company Elementis went down like a lead balloon. The firm’s shares fell 10.9 per cent, or 31p, to 252.8p after it announced it had picked up talc maker Mondo Minerals for £455m from private equity giant Advent International.
Meanwhile Telecoms firms Talktalk and Daisy decided to pull out of the deal that they had organised. The firms said they had ‘jointly agreed’ not to go ahead with the proposed sale of Talktalk’s B2B unit to Daisy.
The last-minute cancellation means that both firms will likely have wasted a significant sum of money on advisers’ fees. Talktalk’s shares ended the day down 2.5 per cent, or 2.7p, at 105p.
And there was bad news for Neil Woodford, who has seen a number of his portfolio companies struggle over the last 18 months.
AIM-listed Itaconix, which manufactures ingredients for cleaning products, was forced to suspend trading in its shares yesterday as it warned it could fall into administration. Itaconix, which was last trading at a market value of £5.3m and which Woodford’s funds own 34.3 per cent of, has been desperately seeking further funding to stay afloat, but said yesterday that it had no luck so far.