Jurisdiction(s):
United Kingdom

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Key definition

Working Capital definition

What does Working Capital mean? In legal practice, working capital describes the liquid resources a business needs to fund its general operating requirements, usually calculated as current assets minus current liabilities (net working capital). It is not defined by statute or case law in England & Wales, Scotland, Northern Ireland or Ireland; it is an accounting and commercial concept, typically defined in contracts. Typical components include trade receivables and inventories less trade payables and accruals. Share purchase agreements, loan agreements and facility agreements frequently tailor the definition by including or excluding items such as cash, debt, tax, intercompany balances and exceptional or non‑recurring items. - M&A: purchase...

Template reporting accountants’ letter confirming working capital statement for a prospectus relating to secondary share offers (placings, open offers or rights issues)

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Precedents

[ Print on letterhead of Reporting accountants ]

The Directors
[ insert name and address of issuer ]
and
[ insert name and address of sponsor or nominated adviser (as relevant) ]
[ insert date ]

Dear [ insert name ]

[ Insert name of company ] (the Company): [ Placing AND/OR Open offer AND/OR Rights issue ] of [ insert number ] [ insert class ] shares of [ insert nominal value ] each

We refer to the Working capital statement (Working Capital Statement) included in the Company’s prospectus dated [ insert date ] (the Prospectus), and to the attached board minute approved by the directors, which records their belief that there is a reasonable basis for making the Working Capital Statement:

“In the Directors’ opinion, having undertaken due and careful enquiry, the Working Capital available to the Company [ and its group ] is adequate for its present needs, namely for at least 12 months from the date of [ Admission OR this document ].”

We confirm that, in our view, the Directors have made the Working Capital Statement after due and careful enquiry.

Yours [ faithfully OR sincerely ]
[ Insert name of reporting accountants ]...

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Web page updated on 28/05/2026

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