WEST RANGA INVESTMENTS LIMITED

Executive Summary

West Ranga Investments Limited is a recently formed holding company with significant intra-group receivables offset by equal long-term bank debt, resulting in a marginally negative net asset position. The company’s ability to meet debt obligations depends heavily on the financial strength and support of its parent and group entities. Credit approval is recommended on a conditional basis, requiring close monitoring of the parent’s financial health and the collectability of intercompany balances.

WEST RANGA INVESTMENTS LIMITED - Analysis Report

Company Number: SC758367

Analysis Date: 2025-07-29 20:11 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   West Ranga Investments Limited is a newly incorporated holding company with a very large debtor balance primarily consisting of amounts owed by group undertakings (£8.98M). While current assets exceed current liabilities comfortably, the company shows a net liability position due to long-term bank loans (£8.75M). The directors have not provided audited accounts but have filed timely financials. Given the company’s reliance on related party receivables and significant long-term debt, credit approval should be conditional on confirmation of the underlying group entities’ financial strength and ongoing support commitments from the parent company, West Ranga Investments Holdings Limited.

2. Financial Strength:
   The balance sheet shows total current assets of £9.15M against current liabilities of £0.40M, resulting in strong net current assets of £8.75M. However, this is offset by long-term bank loans of £8.75M, resulting in net liabilities of £493, a very small negative equity position. The company’s capital base is minimal (£1 share capital), and accumulated losses (£494) are negligible. The financial structure is highly leveraged but balanced by large intra-group receivables classified as current assets. The company depends heavily on the financial health of its parent and group companies, with no external trading assets or employees.

3. Cash Flow Assessment:
   Cash at bank is low (£56.9k) relative to debt levels, indicating limited liquid resources on hand. The large debtors figure is mainly intra-group balances which may not be readily convertible to cash in a short time frame. Current liabilities are low, suggesting minimal immediate cash outflows. However, the significant long-term loans require ongoing servicing. Without independent cash generation or external trading income, the company’s liquidity hinges on the group’s ability to support it. Working capital is positive but not indicative of operational cash flow strength.

4. Monitoring Points:

• Monitor the creditworthiness and liquidity of the parent company and related group undertakings owing the receivables.
• Track any changes in long-term loan covenants and repayment schedules.
• Watch for timely filing of future accounts and confirmation statements to ensure ongoing compliance.
• Scrutinize the nature and collectability of intra-group receivables, including any potential impairment risks.
• Assess the company’s ability to generate independent cash flows or diversify assets beyond group loans.