Highveld Detailing Business Plan — Funding Requirement and Structure
The funding requirement, how each tranche is applied and the terms on which it is drawn.
Section 28 of 38
Funding Requirement and Structure
Jump to section
- 0. Basis of Preparation and Important Notice
- 1. Executive Summary
- 2. Investment Thesis
- 3. What Must Be True, and What Would Break the Thesis
- 4. Company, Structure and Governance
- 5. The Customer Problem and the Value Proposition
- 6. Service Portfolio, Pricing and Contribution
- 7. Industry Structure and Profitability
- 8. Market Sizing and the Addressable Opportunity
- 9. Customer Segments and Buying Behaviour
- 10. Competitive Landscape
- 11. Business Model and Revenue Architecture
- 12. Channel Economics: Where the Capital Should Go
- 13. Go-to-Market Strategy
- 14. Operating Model
- 15. People and Organisation
- 16. Strategic Plan
- 17. SWOT and Strategic Implications
- 18. Risk Analysis
- 19. ESG, Transformation and Development Impact
- 20. Implementation Roadmap
- 21. Financial Assumptions
- 22. Cost Structure and Operating Leverage
- 23. Projected Income Statement
- 24. Projected Balance Sheet
- 25. Projected Cash Flow
- 26. Capital Expenditure
- 27. Funding Requirement and Structure
- 28. Debt Serviceability
- 29. Break-even Analysis
- 30. Valuation and Investor Returns
- 31. Sensitivity and Scenario Analysis
- 32. Key Performance Indicators and Management Dashboard
- 33. Exit Strategy
- 34. Conclusion and Recommendation
- A. Appendix A: Detailed Assumptions Register
- B. Appendix B: Roll-out Schedule
- C. Appendix C: Model Integrity Verification
The business requires R31.4m at its deepest point, in month 38. R41.5m is committed. The R10.1m of apparent headroom is not surplus: the downside case needs R17.8m more than the entire stack.
Sources of funds
Table 50. Sources of funds
|
Source |
Amount |
Share |
Terms and rationale |
|---|---|---|---|
|
Ordinary equity — Tranche A |
R15.0m |
36% |
Subscribed at month 1. Funds the flagship studio, the academy, the first mobile units and the initial dealer pilots. |
|
Ordinary equity — Tranche B |
R9.0m |
22% |
Subscribed at month 15, subject to the milestone gate in Section 4. Funds the second studio and accelerated dealer mobilisation. |
|
Development-finance term loan |
R9.0m |
22% |
10.50% over 84 months with a 36-month capital moratorium. Priced on the employment and skills profile in Section 19. |
|
Asset finance facility |
R4.5m |
11% |
12.25% over 48 months, secured on vehicles and equipment. Matches asset life to funding tenor. |
|
Working-capital revolving facility |
R4.0m |
10% |
13.75%, drawn as required against the debtor book. Covers the dealer settlement lag. |
|
Total committed capital |
R41.5m |
100% |
Use of funds
Table 51. Use of funds
|
Application |
Amount |
Share |
Comment |
|---|---|---|---|
|
Flagship studio — fit-out, plant & energy |
5.93 |
14% |
Irreversible; committed before revenue |
|
Second studio — fit-out, plant & energy |
6.23 |
15% |
Milestone-gated at month 15 |
|
In-dealership unit equipment (31 units) |
11.16 |
27% |
Scales with proven demand; redeployable |
|
Mobile fleet units (6 vehicles) |
3.91 |
9% |
Asset-financed; readily resaleable |
|
Pre-operating: brand, academy, recruitment, first fill |
1.90 |
5% |
Largely expensed as incurred |
|
Transaction, legal and structuring costs |
1.10 |
3% |
Arrangement fees and legal work at close |
|
Operating losses to EBITDA break-even |
5.69 |
14% |
Cumulative losses to month 13 |
|
Working-capital investment |
3.11 |
7% |
Debtor book net of supplier credit |
|
Liquidity headroom / contingency |
2.46 |
6% |
Partial buffer only; see the note below |
|
Total application of funds |
41.50 |
100% |
Sources equal uses exactly |
Why this structure rather than another
- Equity carries the pre-revenue risk, as it must. R24.0m of equity against R13.5m of term and asset debt gives a gearing at close that no commercial lender would exceed for a business with no trading history. The equity funds the losses; the debt funds assets with resale value.
- The moratorium is structural, not cosmetic. The 36-month capital moratorium exists because the business cannot service amortising debt in FY2029 or FY2030. Without it, the plan fails on liquidity in year two regardless of operating performance. This is the single most important term in the debt package.
- Asset finance is matched to asset life. Vehicles and equipment are financed over terms approximating their useful lives, and are realisable if the plan stops. This is the portion of the capital structure with genuine recovery value in a wind-down.
- The revolver addresses a specific, identified mismatch. Dealer settlement at 52 days against 32-day supplier terms creates a structural gap that widens as the dealer channel grows. The revolver funds that gap rather than funding losses.