Lumina Specialist Hospital — Funding Strategy & Structure

The R900 million funding strategy and structure across senior debt, development finance and equity, the gearing, the security package and the detailed use of proceeds.

Lumina Specialist Hospital Business PlanSection 14 › Funding Strategy & Structure

Section 14 · Business Plan

Funding Strategy & Structure

The R900 million funding strategy and structure across senior debt, development finance and equity, the gearing, the security package and the detailed use of proceeds.

The Project seeks R900m of total funding in a blended structure that
balances affordable senior leverage, patient development-finance capital
and risk-bearing equity, with a reserve to carry the venture through the
ramp.

14.1 Uses of funds

Use of funds Amount Share
Land & site works R55m 6%
Building & MEP R360m 40%
Medical equipment R210m 23%
IT, HIS & networks R28m 3%
Pre-opening R37m 4%
Contingency R30m 3%
Ramp-up & debt-service reserve R180m 20%
Total uses R900m 100%
Figure 24.
Figure 24. Project cost composition (R720m hard cost).

14.2 Sources of funds

Senior secured debt funds the lowest-risk portion of the asset base,
secured against the property and equipment. Subordinated
development-finance (mezzanine) capital sits between senior debt and
equity, capitalising its interest during the ramp to protect early cash
flow. Equity — from the Sponsor, a strategic partner and a B-BBEE
consortium — absorbs first-loss risk.

Figure 25.
Figure 25. Funding structure — senior, subordinated and equity layers.

14.3 Indicative term sheet

Term Senior facility Subordinated (mezzanine)
Amount R450m R150m
Pricing ~11.75% p.a. ~14.0% p.a. (PIK in ramp)
Tenor Up to 15 years ~10 years (bullet)
Repayment 3-yr grace, amortise Yrs 4–15 PIK Yrs 1–3, cash Yrs 4–7, bullet
Security First-ranking over property & equipment Second-ranking / subordinated
Key covenants DSCR, net debt/EBITDA, reserve Inter-creditor, subordination

Indicative terms only, for discussion; final terms subject to credit
approval, due diligence and definitive documentation.

14.4 Conditions & protections

  • Funded debt-service and ramp-up reserve sized to a stressed
    occupancy ramp.
  • Cash-sweep above target cash, and dividend lock-up until DSCR and
    leverage tests are met.
  • Milestone-based construction drawdowns with independent technical
    adviser sign-off.
  • Fixed-price construction contract with retention and performance
    security.
  • Step-up covenant profile rather than flat base-case covenants
    from Year 1.
  • Information, board-observer and key-person protections for
    capital providers.
Funding caveat

The structure assumes senior debt at ~11.75% and committed
subordinated and equity capital that are, at this stage, indicative
rather than secured. Pricing, gearing and the availability of
development-finance capital will be set by the market and by due
diligence. The high closing gearing (~67% debt) leaves limited headroom
for cost overruns or a slow ramp; a larger equity cushion would
materially de-risk the structure.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Lumina Health Holdings (Pty) Ltd.