Two Seasons Garlic Business Plan — Debt Serviceability
Debt service across the R14.0m agricultural facility, the 24-month capital grace and cover through the build.
Debt Serviceability
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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
Interest during the build is serviced from equity; from FY2030 operating cash covers debt service almost twice, and net debt is negative by FY2031.
|
R million |
FY2027 |
FY2028 |
FY2029 |
FY2030 |
FY2031 |
|---|---|---|---|---|---|
|
Opening balance |
0.00 |
14.00 |
14.00 |
11.20 |
8.40 |
|
Drawdown |
14.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
Repayment |
0.00 |
0.00 |
(2.80) |
(2.80) |
(2.80) |
|
Closing balance |
14.00 |
14.00 |
11.20 |
8.40 |
5.60 |
|
Interest at 11.5% |
1.61 |
1.61 |
1.45 |
1.13 |
0.81 |
|
Total debt service |
1.61 |
1.61 |
4.25 |
3.93 |
3.60 |
|
Cash available for debt service (EBITDA – tax – ΔWC) |
(4.72) |
(2.16) |
1.49 |
7.61 |
13.74 |
|
DSCR (x) |
-2.93 |
-1.34 |
0.35 |
1.94 |
3.81 |
|
Interest cover, EBITDA / interest (x) |
-2.84 |
-0.84 |
2.12 |
8.71 |
22.37 |
|
Debt / EBITDA (x) |
n/m |
n/m |
3.65 |
0.86 |
0.31 |
|
Net debt / EBITDA (x) |
n/m |
n/m |
1.18 |
0.44 |
-0.20 |
Table 51. Debt schedule and coverage ratios.
The facility is structured with a 24-month capital grace period and interest serviced from the equity raised, recognising that EBITDA is negative in the first two seasons. A lender will require an interest-reserve account funded from the seed round (R3.2m covering FY2027–28 interest) and covenant testing commencing FY2030, when DSCR is 1.9x. From FY2031 the company has debt capacity well beyond the facility: at 2.0x net debt/EBITDA it could carry R36m of debt against R4.8m outstanding. The facility could be refinanced on concessional DFI terms at Series A without altering the conclusions.