Subprime lender Amigo Holdings has appointed Craig Ransley as a board consultant as part of an effort to explore strategic options for the firm to remain a listed company, specifically by identifying and pursuing a reverse takeover in the mining sector.
Amigo said on Monday that shareholders should note that there was no guarantee a reverse takeover will be agreed, but if it was agreed, it would be conditional on shareholder approval and publication of a prospectus approved by the Financial Conduct Authority.
Under Ransley's consultancy agreement, Amigo will pay him a fee of £200,000 if he successfully introduces investors to Clear Capital Markets who irrevocably commit to subscribing to a £1.5m capital raise by the firm.
Ransley has agreed to use the fee to subscribe for 57.03m Amigo ordinary shares of 0.25p each. The fee shares, when issued, would represent 10% of Amigo's current issued share capital.
Conditional on the fee share issuance completing, the board expects to formally appoint Ransley as executive chairman.
As of 0825 GMT, Amigo shares had surged 38% to 0.41p.
Reporting by Iain Gilbert at Sharecast.com