FATEH CAPITAL LIMITED

Executive Summary

Fateh Capital Limited holds substantial investment property assets but is burdened with high debt, resulting in a negative net asset position and modest liquidity. While the company shows some working capital improvement, the weak equity base and reliance on related party debt present credit risk. Lending may be considered conditional on secured arrangements and stringent monitoring of liquidity, cash flow, and asset valuations.

FATEH CAPITAL LIMITED - Analysis Report

Company Number: 13173584

Analysis Date: 2025-07-29 20:07 UTC

1. Credit Opinion:
   CONDITIONAL APPROVAL. Fateh Capital Limited is an active private limited company involved in real estate letting and operating. The company shows a significant fixed asset base in investment property, which increased from £1.58M to £1.76M over the last year, indicating ongoing capital investment. However, the balance sheet shows a negative net asset position of £9.6k as of February 2024, down from a positive £1.1k the previous year, primarily due to high current liabilities and long-term payables totaling approximately £1.9M. This weak equity position suggests limited buffer to absorb financial stress, raising concerns about solvency risks. The company's ability to meet short-term obligations is strained given current liabilities exceed current assets. Approval is possible if lending is structured with caution, potentially secured against property assets, and subject to close covenant monitoring.

2. Financial Strength:
   The company’s financial strength is moderate to weak. Fixed assets (investment property) constitute the bulk of total assets (£1.76M), providing a tangible collateral base. However, current liabilities (£1.92M) and long-term payables (£1.66M) are substantial relative to net assets, resulting in a shareholders’ fund deficit of nearly £10k. Net current assets improved to £144k from £83k, reflecting slight improvement in working capital, though still modest relative to total liabilities. The negative equity position signals the company has been financing growth heavily through debt rather than retained earnings. The presence of related party debt (amounts owed to group undertaking) also impacts financial independence.

3. Cash Flow Assessment:
   Cash and cash equivalents are low (£8.6k), though slightly improved from £6.9k last year. Current assets include trade and other receivables (£92k), but a significant portion of these (£85k) are due after more than one year, reducing liquidity. The company’s current liabilities (£1.92M) heavily outweigh liquid resources, indicating potential liquidity pressure. Absence of employees suggests a low operating cost base, but cash generation from operations is unclear due to lack of income statement disclosure. The company’s ability to service debt depends largely on timely receipt of receivables and rental income from investment properties. Close cash flow monitoring is essential.

4. Monitoring Points:

• Monitor net asset position and equity trends to ensure no further deterioration.
• Track current ratio and net current assets for liquidity sustainability.
• Review payment performance on current liabilities and bank loans, especially related party loans.
• Validate cash flow from rental income and collection of long-term receivables.
• Watch for any significant changes in investment property valuation or market conditions affecting asset values.
• Ensure timely filing of accounts and confirmation statements continue to avoid regulatory penalties.