Two Seasons Garlic Business Plan — Funding Requirement and Structure
R9.0m seed, R15.0m Series A at month 14, R11.0m Series B at month 33 and a R14.0m agricultural term facility.
Funding Requirement and Structure
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- Overview & contents
- 1. Executive Summary
- 2. Investment Thesis
- 3. Company and Business Overview
- 4. Problem, Customer Need and Value Proposition
- 5. Products and Services
- 6. Industry Analysis
- 7. Market Analysis
- 8. Customer Analysis
- 9. Market and Competitive Landscape
- 10. Business Model
- 11. Go-to-Market Strategy
- 12. Operating Model
- 13. Management and Organisation
- 14. Strategic Plan
- 15. SWOT Analysis and Strategic Implications
- 16. Risk Analysis
- 17. ESG and Sustainability
- 18. Implementation Roadmap
- 19. Financial Model and Revenue Build
- 20. Projected Income Statement
- 21. Projected Balance Sheet
- 22. Projected Cash Flow
- 23. Capital Expenditure and Working Capital
- 24. Funding Requirement and Structure
- 25. Break-Even Analysis
- 26. Investment Case and Returns
- 27. Debt Serviceability
- 28. Sensitivity and Scenario Analysis
- 29. Key Performance Indicators and Management Dashboard
- 30. Conclusion
- A. Appendix A: Assumption Register
- B. Appendix B: Conditions Precedent to the Seed Subscription
- C. Appendix C: Glossary
A funding need of about R46m is met by R35.0m of equity in three tranches and a R14.0m term facility, leaving a minimum cash buffer of R4.1m in FY2030.
|
Use of funds |
R million |
Share |
Source of funds |
R million |
Share |
|---|---|---|---|---|---|
|
Capital expenditure |
40.7 |
83% |
Seed equity (month 1) |
9.0 |
18% |
|
Trading losses FY2027–28 |
5.9 |
12% |
Series A equity (month 14) |
15.0 |
31% |
|
Working capital (FY2031) |
7.0 |
14% |
Series B equity (month 33) |
11.0 |
22% |
|
Purchased planting stock |
1.2 |
2% |
Agricultural term facility |
14.0 |
29% |
|
Interest during build (FY2027–29) |
4.7 |
10% |
|||
|
Cash buffer and contingency |
(10.5) |
balance |
|||
|
Total |
49.0 |
100% |
Total |
49.0 |
100% |
Table 45. Sources and uses of funds over the plan period (R million). Operating cash flow from FY2029 funds the balance of capex and debt repayment.
24.1 Funding structure and rationale
|
Instrument |
Amount |
Timing |
Terms |
What it funds |
Rationale |
|---|---|---|---|---|---|
|
Seed equity |
R9.0m |
Month 1 |
Ordinary shares; R20.0m post-money; board seat |
First plantings, planting stock, curing sheds, core mechanisation |
Unproven agronomy and trade-policy risk require equity |
|
Series A equity |
R15.0m |
Month 14 |
Ordinary shares; R48.0m post-money; board seat |
Packhouse, grading, cold store; expansion to 48 ha |
Released against first-harvest evidence and seed retention |
|
Series B equity |
R11.0m |
Month 33 |
Ordinary shares; R76.0m post-money |
Peeling line; expansion to 92 ha |
Released against retail listing; last equity round |
|
Agricultural term facility |
R14.0m |
Month 1 |
11.5% (repo + 4.5%); 7 years; 24-month capital grace; 5 equal annual repayments; secured over PPE, cession of crop insurance and receivables |
Irrigation, land development, part of packhouse |
Long-life assets suit term debt; DFI refinancing targeted |
|
Seasonal overdraft |
R3.0m |
FY2029 |
Prime-linked; undrawn in base case |
Working-capital peaks |
Buffer only |
Table 46. Proposed capital structure.
The structure places debt only against long-life physical assets and keeps leverage modest: debt-to-equity falls from 1.6x at FY2027 to 0.2x at FY2031. Shareholder loans and asset finance were considered and rejected at this stage, the former because it complicates the cap table across three rounds, the latter because mechanisation is better funded from equity during the loss years. A grant or concessional tranche from a DFI agricultural window would substitute for part of the commercial facility and is being pursued, but is not assumed.
