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Optimising debt and equity investment in a subsidiary

Financial and insolvency analysis plays an important part in determining the optimum mix of debt and equity investment in a subsidiary, especially in situations in which regulatory concerns on subsidiary investment are important. 

One example is with the unregistered subsidiaries of housing associations. Not only must trading be on an arm’s length basis, all loan funding must similarly be provided not only on an arms’ length basis but also the housing association must not act as lender of last resort to its subsidiary. We have managed this issue by careful financial analysis and modelling as the basis for providing a client with a reliable opinion on the value of investment needed.

Please note that the above is provided for illustration purposes only and comprises a short view of extremely complex insolvency and other legislation. This is a complicated area and specific advice must be sought before undertaking any course of action or before refraining from any course of action. Gore and Company takes no responsibility for any loss incurred to or by any person who either acts or refrains from acting on the basis of the above or of any other item published on this website. The above note may not be reproduced without the prior written consent of Gore and Company.

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