LAKSHMY UK INVESTMENTS LTD

Executive Summary

Lakshmy UK Investments Ltd has significant investment property assets but carries negative equity due to substantial related-party borrowing. The company maintains positive working capital and improved cash balances, yet its financial leverage and negative net assets pose moderate credit risk. Conditional approval is advised with careful loan structuring and ongoing monitoring of liquidity and solvency metrics.

LAKSHMY UK INVESTMENTS LTD - Analysis Report

Company Number: 13583998

Analysis Date: 2025-07-29 13:04 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Lakshmy UK Investments Ltd is an active private limited company primarily engaged in real estate investment trust activities. The company shows significant fixed assets in investment properties and tangible assets, indicating a capital-intensive business model. However, it reports net liabilities (negative shareholders’ funds) of approximately £80,764 as of August 2024, worsening from the previous year. Current liabilities have increased substantially to nearly £2 million, mainly due to a long-term loan from its parent company Minicom Enterprises Ltd, now accruing interest at 5.25%. While the company has positive net current assets and increased cash balances, the overall negative equity and reliance on related-party funding present credit risks. Approval is recommended only if the loan facility is structured with clear repayment terms and if the company can demonstrate ongoing cash flow generation to service debt.

2. Financial Strength:
   The balance sheet shows strong fixed asset backing totaling £1.77 million, mainly investment properties valued at £1.12 million and tangible assets of about £650k. However, the company’s net liabilities and negative equity position raise concerns about capital adequacy and solvency. The increase in long-term creditor balances from £1.33 million to £1.96 million reflects additional borrowing, increasing financial leverage. The absence of audit and limited disclosure on profitability restrains full financial strength assessment, but the asset base provides some security against lending risk.

3. Cash Flow Assessment:
   The company’s current assets rose from £59,843 to £110,361, with cash improving to £100,661, providing liquidity to cover short-term commitments. Net current assets remain positive, supporting working capital stability. However, given the large non-current loan and accrued interest, actual cash flow requirements for debt servicing may be significant. No profit and loss account was filed, limiting insight into earnings or operational cash generation. Monitoring cash flow forecasts and ensuring timely interest and principal repayments is critical.

4. Monitoring Points:

• Watch changes in net liabilities and equity position to detect worsening solvency.
• Monitor cash balances and working capital closely to confirm liquidity adequacy.
• Review loan repayment schedules and related-party transaction terms for risk of default or refinancing needs.
• Assess any future changes in investment property valuations that could impact asset security.
• Request periodic management accounts to track profitability and cash flow trends.