From mainFT yesterday:
Amigo Holdings, the ailing UK subprime lender currently winding down its business, is in talks over a move into the music and film streaming market in a bid to generate “some small value” for shareholders…
…Amigo’s shares have been suspended from trading pending more news on the deals. The company said that if the transactions went through, existing shareholders would be “significantly diluted”. The deals could result in a cash subscription of at least £5mn for newly issued shares, it added.
The agreement to enter exclusive talks until December 14 comes after an “extensive search” for financing for Amigo’s lending business, a task that the company concluded was “effectively not possible”.
It’s hard to feel much sympathy for Amigo, a subprime lender that collapsed after the regulatory eye of Sauron finally turned on its loan terms. Readers can reacquaint themselves with the full sorry story, including long-running boardroom drama, here.
Ambitions now are … not high. Here’s Danny Malone, Amigo’s outgoing chief executive:
Over the past few months we have remained open to investment opportunities that would allow the business to restart, but have always said the likelihood of success to be very low. Unfortunately, that has been the case. The Proposed Transactions offer a solution that, if complete, would deliver some small value to shareholders which wouldn’t be possible otherwise.
So, when nothing else works, try streaming. Amigo says it has . . .
entered into an exclusivity agreement with Craven House Capital plc and others, ending 14 December 2023, to enable them and the Company to further explore transactions
Here’s what it is proposing to “acquire”:
— ONEBas.com: “a music streaming service, based in Norway, offering free streaming of music”
— Magazinos: “a worldwide digital magazine platform… founded in 2014 in Stockholm, Sweden by a team of Swedish and Norwegian tech entrepreneurs”
— TV Zinos: “founded in 2019 by a group of tech entrepreneurs in Sweden as a TV / Film streaming service for global distribution”
— Payzinos: “a payments business currently in development following a previous pilot”
It’s interesting that these are framed as separate products because, as the “-zinos” suffix indicates, there are some links.
The first three are all founded by Cato Crogh, a Stockholm-based Norwegian entrepreneur, abstract expressionist artist and former restaurateur and nightclub owner. They’re listed as projects of Stormvik, the website of which says it is an investment company with a Canary Wharf address.
We say “acquire” in inverted commas, incidentally, because Craven House’s own RNS release says (our emphasis):
Amigo proposes to acquire the assets… via a reverse takeover resulting in the enlarged group being listed on the Main Market of the London Stock Exchange.
The phrase “reverse takeover” is nowhere to be found in Amigo’s release.
Amigo declined to comment. A person familiar with the company told Alphaville that the transaction is structured as a reverse takeover that will give the consortium nearly all the failed lender’s equity.
But we’re getting ahead of ourselves — what are the products like?
Scrapes together strong
OneBAS is, it is true, a music streaming website — but it would be more informative to call it a user interface for watching YouTube videos. Its site describes the product thusly:
ONEBas.com Music is an optimised search engine, like Google and Hotels.com, we don’t host any music but only refer to what is already free circulating on the internet. If the music is anywhere out on the internet, our search engine will find it. It’s entirely free for artists / publishing houses to appear at our digital platform. Being accessible here enables circulation of the music and sells the albums for a $ each where the artist receives 70% of the revenues. It’s free to use all music on ONEBas.com Music for all and it also contains a premium subscription alternative where you can download all albums for $ each. ONEBas.com Music is an elegant, vibrant and modern way to consume music. The feeling of an international music store with the best music on show.
Stormvik calls it:
an elegant, vibrant, and modern way to consume music
The interface is styled a little like Spotify, but rather than playing from a site-hosted database it streams an embedded YouTube video. This presents a problem when embedding said video is blocked, as Alphaville found when we tried to listen to Doja Cat’s Paint the Town Red:
As OneBAS explains on its terms & conditions page:
Simply put, ONEbas.com is a combined search engine and digital music service. Basically, the service does not have any albums stored on its own servers, as it retrieves music from the web and stores it in its cache memory. According to ONEBas.com Music’s CEO, Cato Crogh, it’s a bit like searching for an album on Google to listen or download. In addition, artists can upload their music to the service via a separate artist account, so that the album will be available at ONEBas.com’s own database. On ONEBas.com Music you don’t buy albums, you are paying for using the ONEBas.com Music search engine.
Regardless of whether the artist chooses to upload the music via their own account or whether it is available via other websites, 70 percent is paid to the artist when an album is searched and downloaded. It is also important to include that the service is 100 percent artist-friendly in the form that it is easy to block that an album can be downloaded via the service if the artist so wishes, he says.
There’s nothing wrong with such a setup in theory — indeed, for some users the wrapper might be preferable to YouTube’s own interface.
But OneBAS clearly doesn’t own outright the rights to the content it is offering to stream, which makes the offer of paid song downloads for registered users more eyebrow-raising. Crogh told Alphaville that OneBAS can’t sell music yet, but is in talks with Universal about a deal.
Magazinos is a similar service, albeit for the pixelled word. Its website offers users “Access to read 131540 Magazine for FREE”. Stormvik’s site provides a bit more clarity on what is going on:
Magazinos.com is an optimized search engine, like Google and Hotels.com, we don’t host any magazines but only refer to what is already free and circulating at the internet. If magazines are anywhere out on the internet, our search engine will find them.
So, PDF scraping. The login screen is mildly confusing…
…as is the fact that logging in seems unnecessary: we were able to download copies of Easy Crochet Projects and CARPology (“Carp fishing’s biggest monthly read”) without registering. These PDFs appear to all be hosted via Dropbox, so it’s hard to know exactly what the ownership situation is here.
TV Zinos is… you get the picture: a user interface to watch thousands of TV channels or shows that are available for free online. Stormvik describes it as:
an elegant, vibrant, and modern way to see streamed TV and Film
Alphaville couldn’t get any of the shows we tried to play, but watching Sky News (via an embedded YouTube stream) worked.
TV Zinos also offers a birthday service, which scrapes data from the Internet Movie Database.
Some other services that appear to be part of the -zinos ecosystem (their web icons are pictured somewhere near this paragraph) didn’t make the cut.
Razinos, a free radio streaming service (displayed as “Redio” on the sites), has been overlooked, as has an “Actor” service, Age of Artist, that directs to an IMDb-fed birthday page identical to the “Birthday” service on TV Zinos. Crogh also appears to have made several other ventures into the -zinos space over the years, including “moccazinos”, “limozinos”, “medizinos” and, uh, “hozinos”.
Subjectively, even for London’s tech-starved indices, these do not look like stunning business opportunities. In fact, we were interested to know how they even ended up on Amigo’s radar.
Things worked the other way around, it turns out.
“I used Morningstar,” Crogh told Alphaville:
And I [looked up] ‘Who is the company that has done the worst over the last year?’ and one of the companies was Amigo Holdings. I had no clue about what Amigo Holdings was. So I just sent them an email. I said: ‘Could it be interesting to do a reverse takeover by using the company as a shell? If so, please contact me so we can have a call.’ I got a reply… ‘Yes, we want to have a call with you’. Good! I had no clue.
The group’s extant websites say they are “Powered by Stormvik”. Stormvik says (its spacing) that it . . .
invests in companies that use technology to solve pressing problems that face society today.Maximize the use of our permanent resources by acting as a courageous, long-term partner and dependable counselor to great entrepreneurs.Addressing issues influenced by digital disruption as well as climate change, which is the most significant concern facing our age.
Its goal . . .
is to become one of the top publicly traded growth investors in Europe.
Here is some more copy:
Stormvik’s website lists an address at 21 Cabot Square, which Alphaville’s east London readers will know is in the heart of Canary Wharf. Or at least, it kinda is, because there isn’t a building called 21 Cabot Square. There is a Land Registry record for it, but it’s unclear what area of land the record refers to, and whether it gets post.
There also isn’t any company called Stormvik listed on Companies House, nor any companies listed at 21 Cabot Square. But Crogh was happy enough to confirm to Alphaville that he is effectively Stormvik.
Dopamine clouds over Craven House Capital
More information is available about Craven House Capital, the company mention in Amigo’s proposed transaction announcement. CHC is based at the intersection of Upton Park, Plaistow and East Ham, in east London.
Craven House’s latest accounts list it as owning stakes in four companies, with each investment worth $1.6mn: Garimon Limited, Rosedog Limited, Honeydog Limited and Bio Vitos Medical Limited. Here’s what they do:
— Garimon (29.9 per cent stake): Garimon owned two domains as of May 2022: magazinos.com and onebas.com, the magazine and music scrapers we encountered earlier. The accounts say:
However, since Craven’s year end in May 2022, the onebas.com domain was “transferred out of Garimon and into a new entity (Stormfjord Ltd)”, which has since raised $500,000 and $20,000 through “two round of arms-length funding”, reportedly giving the domain a $5mn valuation. More on that shortly.
— Bio Vitos Medical Limited (24.5 per cent stake): This company makes a “patented heart drug” called Succifer, also marketed as Inofer, as well as “a number of dietary/Omega-3 supplement products, marketed under the ‘Ocean Skin Lab’ brand.” Craven says Bio Vitos management “are in ongoing negotiations” with third parties to develop distribution channels.
— Rosedog Limited (29.9 per cent stake): Rosedog owns TV Zinos, which Craven says is expected to generate advertising revenue in 2023.
— Honeydog Ltd (29.9 per cent stake): Honeydog is . . .
the 25 per cent owner of the entity which owns the licence to manufacture and distribute the chemotherapy drug SI-053 ‘Temodex’
which is . . .
approaching the end of a period of clinical trials
Overall, it’s a broad portfolio.
Another oddity is that Craven House’s RNS on the proposed transaction says (our emphasis):
Craven House Capital plc (“Craven House” or the “Company”), the AIM quoted investment company notes the announcement released today by Amigo Holdings PLC (“Amigo”) in relation to its investee companies Garimon Limited (“Garimon”), and Honeydog Ltd (“Honeydog”)…
Which is pretty weird because, assuming the Craven House accounts are correct, Honeydog owns the cancer drug, not the TV streaming platform. It’s Rosedog controls TV Zinos.
We called Craven House repeatedly on Wednesday, but nobody picked up. Thankfully, Crogh was able to provide some assistance:
We do have a reverse takeover [option with] Craven House. So we own 22 per cent of Craven House, but we will later own 85 per cent. So when you talk about Craven House, you are talking about us.
On the Honeydog/Rosedog confusion, he told us that there might be a “misunderstanding” over which assets are controlled by which entity:
“To be honest, I’m not sure,” he said.
As the Crogh files
Crogh’s confusion was perhaps understandable.
Post to Stormfjord Ltd is directed to Bareham & Co, an accountancy firm based at 25 Cabot Square. The company is listed as dormant, which means its accounts are basically a stub. The only listed director is one Cato Crogh, a Norwegian national based in Sweden.
Crogh’s Companies House profile lists him as a director of four other companies, all of which list their correspondence address as care of Bareham & Co:
— Rosezoo Ltd: Incorporated in April, no other information available.
— Rosemonkey Limited: Incorporated in April, no other information available.
— The Times of Group Limited: Incorporated in April, no other information available.
— Snowfjord Limited: Incorporated in August last year, confirmation statement now overdue.
There’s a separate Companies House profile for another Cato Crogh with the same birthday. This Cato Crogh is a director of Honeydog Limited, which is also dormant.
There’s also a separate separate Cato Crogh profile that lists this Cato Crogh as a current director of Bio Vitos Medical Limited, and as a former director of Honeydog Limited.
In fact, there is a total of seven “Cato Crogh” profiles on Companies House, all with the same date of birth date. It goes (perhaps without saying) that many of these Catos Crogh list their correspondence address as care of Bareham & Co.
Additionally, one ‘Mr Cato Crogh’ is listed as a significant shareholder in several companies, including:
— Honeydog Limited
— Bio Vitos Medical Limited
— Rosedog Limited
— Garimon Ltd
So, for all of the companies Craven Capital owns stakes, a Cato Crogh is listed as having “significant influence or control”. He’s the majority shareholder of the companies in the proposed transaction, as well as a bunch of others. We’ve visualised this to make it more clear:
All of which raises a question: why didn’t Crogh get a shoutout in the RNS? He told us:
I don’t know how to answer that. Call me, and I will answer… I am the man. If you go in and see, I own all those domains… I don’t hide it.
Crogh added that he had already received a “slap on the fingers” from the FCA, after journalists contacted regulators to see whether Amigo would be permitted to reopen its loan business. That was not the plan, he told us:
The old business — giving loans to people who never should have loans — we are not going to reopen that. That is maybe the worst business idea whatsoever.
His main focus seems to be the nascent payments firm Payzinos, which he envisions offering bridging loans to businesses:
Don’t give loans to people who shouldn’t have loans. That is unethical. That is crazy… but give it to small businesses who are maybe for short-term need of money.
He’s also not worried that the Amigo brand has been tainted by recent history:
[You] work in the financial business and you are journalists in the financial business — you are more infected by the negative. I think the common man or your friends or your mother and father and so on — they have heard about an evil but they do not know the history… Amigo is a positive word, and positive name.
Less pertinently, Crogh also told us he has produced over 400 large canvasses, but has yet to sell one. He said he would expect the to go for £5,000–£10,000 apiece, but that of the three qualities needed to sell art — to be “a white man and a dead man” — he only had two.
Art is just one side of Crogh’s online life. Here are some recent Instagram posts:
October 10th:
October 10th:
October 11th:
October 16th:
October 17th:
One possible takeaway from all this is that the potential Amigo purchase — a nice bit of M&A by a London-listed firm — was hiding in plain sight. There are other possible takeaways too.
Read the full article here