Amigo Loans hires JP Morgan and RBC to prepare 500 million pound London IPO

LONDON (Reuters) - British subprime lender Amigo Loans is preparing for a stock market float in London that could value the consumer credit firm at more than $700 million.

The company, which offers high interest loans and focuses on borrowers who have weak credit histories, has hired JPMorgan and RBC Capital Markets to examine the potential flotation, according to a person with knowledge of the matter.

Amigo would seek a market capitalization of over 500 million pounds ($695 million) from a listing, the person said.

The Bournemouth-based firm issues loans that are usually guaranteed by a borrower’s family or friends.

Glen Crawford, its chief executive, said almost two years ago that a listing in London was a major plank of the company’s strategy. In a presentation to bond investors published earlier this month, the group said it was exploring a potential initial public offering.

If Amigo presses ahead with a flotation, it would join a host of other financial services firms that are eying stock market debuts on the London Stock Exchange.

They include Cabot Credit Management, which is Britain’s biggest debt collector, as well as peer-to-peer lender Funding Circle, and IntegraFin, operator of the Transact platform used by independent financial advisers.

Amigo is controlled by Richmond Group, which was founded 18 years ago as a loan brokerage by entrepreneur James Benamor, who was then just 21.

Benamor’s Richmond is now a holding company for a variety of other investments, including rental firm Let Me Property, although Amigo remains its main business.

For the nine months through December, Amigo reported a 42 percent jump in adjusted earnings before interest, taxes, depreciation and amortization from a year earlier to 84.6 million pounds. It had a net loan book of 607 million pounds at the close of 2017.

($1 = 0.7195 pounds)

Reporting by Ben Martin; Editing by Susan Fenton