Wonga is a British payday loan company that offers short-term and high-cost credit. The British company is one of the largest in its sector. Recently, the company has endured a tough financial spell and was handed a lifeline when a consortium of high-profile investors gave them an emergency ten million pounds.
In the recent past, Wonga had a New York itemizing that valued the company at seven hundred and sixty-nine million pounds. This current injection of funds was done at a valuation of less than twenty-five million pounds. This in itself spelled doom for the short term money lending firm.
According to various sources, the ten million pounds were sourced from Companions and Balderton Capital. These two funds are long-standing investors tasked with eradicating the instant risk to Wonga’s future. Popular news outlet Sky reported that Wonga's core management principles were advised of the rise in the number of complaints about loans. This rise was attributed to the company adopting new guidelines in 2014 that prompted a significant rise in compensation payouts.
The news outlet also claims that Wonga’s institutional shareholders had been warned by Ms. Kneafsey of the possibility of bankruptcy with no new solid avenues of capital injection. The lending firm’s cash flow became so scarce that the board of directors was considering the sale of assets and holdings to finance the company. The board also looked into the possibility of elevating extra debt.
The time restriction for legacy complaints and the irresponsible lending tendencies of the company are among the few factors that have been credited for contributing to Wonga’s downfall.
The new lifeline offered by the consortium of high-end investors made it easier for Wonga's main branch (in the United Kingdom) to offer its subscribers money from June. The administration body of this division was at risk of breaching their duties had the new lifeline come in time.
The company was in financial troubles as early as 2016. There were several people who were protesting the company's policies during this period. They felt that the policies in question would lead to the downfall of the company. The company employs roughly six hundred employees reported losses in consecutive financial years. This led to the company enduring hurdles set by a couple of regulatory bodies with an emphasis on the cap price of short-term loans.
In 2016 the money lending firm reported losses of sixty-five million pounds. The following financial year was spent on promoting policies that would lead to profitability. The 2017 financial reports haven’t been released so it is hard to compute whether Wonga achieved this objective.
Allegiant Finance Services Limited, a competitor of Wonga in Wales and England, claims that the short-term credit score industry is showing positive signs. The industry is offering better payouts in claims that are associated with legacy loans.
Wonga’s workforce has also come together to raise around ten million pounds to be used to finance the continuity of the company.
Recently Wonga raised its marketability profile by sponsoring Newcastle United, which plays in the Barclays Premier League.
Publish Date : 08 Ağustos 2018 Çarşamba 01:27
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