Administrators have announced they will conduct “an orderly wind down” of the payday lender Wonga, which will involve the sale of assets and identifying creditors.
Wonga, once Britain’s biggest payday lender, filed for administration after a flood of compensation claims and accounting firm Grant Thornton was appointed on Friday.
The company has an estimated 200,000 customers, who still owe more than £400m in short-term loans and are being told to continue making repayments.
Grant Thornton also said that while customers with compensation claims over mis-selling should continue to approach the company, they would be “dealt with as unsecured creditors”, assuming they were valid.
This means they will sit behind secured creditors when Grant Thornton doles out the proceeds from the Wonga asset sale and are unlikely to receive a full payout.
The administrators said: “Despite efforts to restructure the business, which included an injection of funding by the group’s shareholders, the business was unable to be restored to profitability due to the level of redress claims. As a result, the management team had no alternative but to place the companies into administration.
“Following the appointment of administrators there will be no new lending activity. The administrators will conduct an orderly wind down of the business and sale of the assets and start the process of identifying all creditors, in accordance with their statutory obligations.”
