OHRZACH 2 LTD

Executive Summary

Ohrzach 2 Ltd presents a medium risk profile due to substantial borrowings relative to net assets and minimal cash reserves, which may pressure liquidity and solvency. However, the company maintains good regulatory compliance and a stable financial position with controlling ownership. Further due diligence on debtor quality, property valuation, and loan terms is advised to fully assess financial stability and operational sustainability.

OHRZACH 2 LTD - Analysis Report

Company Number: 13922590

Analysis Date: 2025-07-29 17:24 UTC

1. Risk Rating: MEDIUM
   The company shows substantial borrowings relative to its assets, with net current assets positive but a significant loan balance. The limited cash reserves and high debtor balances raise some concerns about liquidity and cash flow management, though the company is not currently overdue on filings or in liquidation.

2. Key Concerns:

• High Borrowings: Long-term bank loans of £734,950 against net assets of approximately £677,490 suggest leverage risk and pressure on solvency if asset values fall or income declines.
• Low Cash Position: Cash on hand is only £100, despite debtors exceeding £443,000. This may indicate collection challenges or timing mismatches in cash flow.
• Debtor Concentration and Valuation: Debtors represent the majority of current assets and are not broken down in detail; potential risk if these amounts are not collectible or are related-party balances. Additionally, no independent valuation of the investment property was conducted in the latest year, relying on a historical figure of £980,000.

3. Positive Indicators:

• Filing Compliance: No overdue accounts or confirmation statements, indicating good regulatory compliance and governance discipline.
• Stable Net Assets: Net assets and net current assets have remained fairly consistent over the last three years, indicating no material deterioration in financial position.
• Ownership and Control: Clear control by Ohrzach Ltd with a 75-100% ownership stake and appointment rights, which can provide strategic stability and potential access to funding.

4. Due Diligence Notes:

• Verify the nature and collectability of the debtor balances, including aging analysis and related-party transactions.
• Obtain or review an independent valuation of the investment property to confirm the fair value and assess potential impairment risk.
• Review loan covenants, repayment terms, and the company’s cash flow forecasts to assess capacity to service the significant borrowings.
• Understand the operational business model and revenue generation given the company’s activity in buying and selling own real estate, to assess sustainability and income streams.
• Confirm directors’ background checks for any undisclosed regulatory or compliance issues, given the small management team.