Wonga has collapsed into administration. The controversial payday lender’s demise puts 500 jobs at risk and comes hours after it stopped accepting applications for loans.
In a statement, Wonga said that having addressed all options the board “concluded that it is appropriate to place the businesses into administration”.
It added: “Wonga customers can continue to use Wonga services to manage their existing loans but the UK business will not be accepting any new loan applications. Customers can find further information on the website.”
Corporate undertakers at Grant Thornton have been appointed to carry out the administration, and it is expected the company will now run Wonga’s loan book.
Customers were being told by the company that, despite the collapse, they are still required to repay any outstanding money.
Over the weekend Wonga said it was “considering all options”, just weeks after shareholders pumped in £10m in a bid to save it from going bust.
Investors in Wonga include Balderton Capital, Accel Partners, Greylock Partners and 83North.
Business news: in pictures
1/5
Iconic British car maker Jaguar Land Rover warned on July 5, 2018 that a “bad” Brexit deal could jeopardise planned investment of more than $100 billion, upping corporate pressure as the government heads into crucial talks.
AFP/Getty
2/5
Spotify traded publically for the first time on the New York Stock Exchange on Tuesday. However, the company isn’t issuing shares, but rather, shares held by Spotify’s private investors will be sold
AFP/Getty
3/5
The deadline to award a contract to make blue British passports after Brexit has been extended by two weeks following a request by bidder De La Rue. The move comes after anger at the announcement British passports would be produced by Franco-Dutch firm Gemalto when De La Rue’s contract ends in July.
The British firm said Gemalto was chosen only because it undercut the competition, but the UK company also admitted that it was not the cheapest choice in the tendering process.
4/5
Phillip Rasmussen, finance chief of technology company IQE, was killed in an accident while on holiday over the weekend. The company confirmed the 47 year old man had died while cycling in Menorca. A 25-year-old American man was arrested on suspicion of drink driving, after failing a roadside breath test.
5/5
The Beast from the East wiped £4m off of Flybe’s revenues due to flight cancellations, airport closures and delays, according to the budget airline’s estimates. Flybe said it cancelled 994 flights in the three months to 31 March, compared to 372 in the same period last year.
1/5
Iconic British car maker Jaguar Land Rover warned on July 5, 2018 that a “bad” Brexit deal could jeopardise planned investment of more than $100 billion, upping corporate pressure as the government heads into crucial talks.
AFP/Getty
2/5
Spotify traded publically for the first time on the New York Stock Exchange on Tuesday. However, the company isn’t issuing shares, but rather, shares held by Spotify’s private investors will be sold
AFP/Getty
3/5
The deadline to award a contract to make blue British passports after Brexit has been extended by two weeks following a request by bidder De La Rue. The move comes after anger at the announcement British passports would be produced by Franco-Dutch firm Gemalto when De La Rue’s contract ends in July.
The British firm said Gemalto was chosen only because it undercut the competition, but the UK company also admitted that it was not the cheapest choice in the tendering process.
4/5
Phillip Rasmussen, finance chief of technology company IQE, was killed in an accident while on holiday over the weekend. The company confirmed the 47 year old man had died while cycling in Menorca. A 25-year-old American man was arrested on suspicion of drink driving, after failing a roadside breath test.
5/5
The Beast from the East wiped £4m off of Flybe’s revenues due to flight cancellations, airport closures and delays, according to the budget airline’s estimates. Flybe said it cancelled 994 flights in the three months to 31 March, compared to 372 in the same period last year.
Earlier this month the lender said its struggles were due to a “significant” industrywide increase in people making claims in relation to historic loans.
It blamed claims management companies for the rise, but said it was making progress against a transformation plan set out for the business.
On Sunday, Wonga said the number of complaints related to UK loans taken out before 2014 had “accelerated further”.
“Against this claims backdrop, the Wonga board continues to assess all options regarding the future of the group and all of its entities,” the company said at the time.
Wonga has been criticised for the high interest it charges on its loans and has been accused of targeting those who are vulnerable.
In 2014 the firm introduced a new management team and wrote off £220m of debt belonging to 330,000 customers after admitting making loans to people who could not afford to repay them.
In the same year the Financial Conduct Authority said it would bring in stricter affordability checks to the industry and introduce a cap on the cost of payday loans on the amount borrowed per day.
