AZUL INTERNATIONAL LIMITED

Executive Summary

Azul International Limited exhibits severe liquidity and solvency weaknesses with negative net assets and working capital deficits. Cash reserves have been fully depleted, raising serious concerns about its ability to meet short-term liabilities and service debt. Given the financial deterioration and lack of sustainable funding, credit facilities are not recommended at this time without significant improvement in financial health and cash generation.

AZUL INTERNATIONAL LIMITED - Analysis Report

Company Number: 13638325

Analysis Date: 2025-07-29 13:34 UTC

1. Credit Opinion: DECLINE

Azul International Limited demonstrates significant financial distress with persistent net current liabilities and a sharply negative net asset position as of September 2024. The company’s working capital deficit of £9,720 and net liabilities of £8,436 indicate poor short-term liquidity and an erosion of equity capital, which undermines its ability to service debt and meet operational expenses reliably. The absence of cash reserves at year-end 2024 further exacerbates repayment risks. The company has minimal tangible fixed assets (£1,585) and relies on an interest-free director loan with no fixed repayment schedule, which may not be a sustainable funding source. The financial trajectory is deteriorating as net assets declined from a positive £162 in 2023 to negative £8,436 in 2024, suggesting operational or financial challenges without visible signs of recovery.

2. Financial Strength:

The balance sheet is weak. Current liabilities exceed current assets by a wide margin, signaling liquidity strain. The company’s equity has turned negative due to accumulated losses (£8,536 in profit and loss reserves deficit), reflecting erosion of shareholder funds. Fixed assets are low-value office equipment with no significant long-term asset base. The director loan is a notable liability, and although it is interest-free and flexible, it does not replace the need for sustainable capital or credit lines. Overall, the company lacks financial resilience and has limited buffer to absorb shocks.

3. Cash Flow Assessment:

Cash at bank dropped from £6,051 in 2023 to zero in 2024, indicating cash depletion. Debtors are relatively low (£5,653) compared to current liabilities (£15,373), suggesting potential collection or revenue generation issues. Negative net current assets imply that short-term obligations cannot be met from existing liquid resources. The company’s working capital position is inadequate and may impair ongoing operations unless new funding is secured or expenses are drastically reduced.

4. Monitoring Points:

• Track cash flow closely, especially cash inflows from debtors and new financing arrangements.
• Monitor changes in current liabilities, particularly tax liabilities, which form the bulk of short-term creditors.
• Watch for director loan repayments or new capital injections that could improve liquidity.
• Assess any improvements in profitability or operational efficiency reflected in future filings.
• Evaluate management’s strategies to restore positive equity and working capital.