HealthPlus Retail Group — Capital Structure & Use of Funds

The ZAR 2.8 billion capital structure, the blended instrument stack of senior, mezzanine and equity, and the detailed use of funds.

Section 11 · Business Plan

Capital Structure & Use of Funds

The ZAR 2.8 billion capital structure, the blended instrument stack of senior, mezzanine and equity, and the detailed use of funds.

11.1 Capital Requirement

HealthPlus is seeking ZAR 2.8 billion in committed capital to execute
the five-year plan set out in Sections 9 and 10. The structure is
engineered to minimise weighted-average cost of capital while preserving
execution flexibility — staged drawdowns aligned to phase gates,
conservative leverage at peak, and a clear path to refinancing on
listing.

The capital structure is investor-engineered: senior
debt is sized only against the asset base it secures; mezzanine bridges
the J-curve; equity captures the upside.

11.2 Capital Stack

The R 2.8B capital stack is split across four instruments. Equity
provides 42.9% of the stack — comfortably the largest component —
supplemented by senior secured debt, a mezzanine tranche to bridge the
J-curve, and a working-capital facility scaled to inventory growth.

Instrument	Amount (ZAR M)	% of Stack	Pricing (indicative)	Tenor
Equity (ordinary shares)	1,200	42.9%	Target IRR 28%+	Permanent
Senior secured debt	850	30.4%	JIBAR + 425 bps	7 years
Mezzanine debt	450	16.1%	17.5% (cash + PIK)	5 years
Working-capital facility	300	10.7%	JIBAR + 280 bps	3 years revolver
Total committed capital	2,800	100%	WACC ~14.8%	—

Table 11.1 — Capital stack summary

11.3 Use of Funds

Capital is allocated across eight strategic categories. The largest
single allocation — R 980M to store rollout — is fully bottom-up costed
against the 450-store plan in Section 9. Working capital and
manufacturing facility together represent the next-largest tranche,
reflecting the scale-driven nature of the model.

Figure 11.1

Figure 11.1 — Allocation of R 2.8 billion in committed capital

Category	Amount (ZAR M)	%	Strategic Rationale
Store rollout (450 stores)	980	35.0%	Fit-out, equipment, opening inventory
Working capital	620	22.1%	Inventory and receivables build to Y3
Manufacturing facility	480	17.1%	Private-label production capability
Distribution centres (3)	320	11.4%	Gauteng, KZN, Western Cape DCs
Technology & digital	210	7.5%	ERP, POS, e-commerce, app, data
Marketing & brand	120	4.3%	Y1–Y2 brand build & loyalty launch
Talent & organisation	50	1.8%	Recruitment, training, bursaries
Contingency	20	0.7%	Unallocated reserve
Total use of funds	2,800	100%	—

Table 11.2 — Use of funds detail

11.4 Drawdown Schedule

Capital is drawn in tranches aligned to phase gates, ensuring that
capital deployment tracks operational milestones rather than calendar
dates. This protects investors from execution slippage and allows
tranche pricing to reflect achieved progress.

Drawdown (ZAR M)	Y1	Y2	Y3	Y4	Y5	Total
Equity	600	300	300	0	0	1,200
Senior debt	0	420	430	0	0	850
Mezzanine	0	180	270	0	0	450
Working capital (gross)	300	0	0	0	0	300
Total drawdown	900	900	1,000	0	0	2,800
Cumulative drawn	900	1,800	2,800	2,800	2,800	—

Table 11.3 — Drawdown schedule by instrument

11.5 Senior Debt Term Sheet (Indicative)

Term	Indicative Provision
Facility size	ZAR 850 million
Tenor	7 years from financial close
Pricing	JIBAR + 425 bps (year 1–4); JIBAR + 375 bps (year 5–7)
Repayment	Bullet years 1–3; equal quarterly amortisation thereafter
Security	First-ranking general notarial bond over moveable assets; cession of bank accounts; special bond over manufacturing facility; pledge of shares in operating subsidiaries
Financial covenants	Net Debt / EBITDA ≤ 4.0x (Y3), 3.0x (Y4), 2.5x (Y5+); Interest cover ≥ 2.5x; Minimum liquidity ZAR 250M
Information undertakings	Monthly management accounts; quarterly compliance certificates; annual audited statements within 90 days
Restricted payments	No dividends until ND/EBITDA < 2.0x and consecutive 12-month positive FCF
Mandatory prepayment	On change of control; on disposal of material assets > R 100M

Table 11.4 — Senior debt indicative term sheet

11.6 Mezzanine Term Sheet (Indicative)

Term	Indicative Provision
Facility size	ZAR 450 million
Tenor	5 years bullet
Pricing	12.5% cash interest + 5.0% PIK interest = 17.5% all-in
Security	Second-ranking; structurally subordinated to senior
Equity warrants	4.5% fully-diluted equity at par; cash-settled at exit at fair market value
Covenants	ND/EBITDA covenant set at 1.0x cushion above senior; cross-default
Prepayment	Make-whole years 1–3; par thereafter

Table 11.5 — Mezzanine indicative term sheet

11.7 Capital Adequacy & Headroom

The R 2.8B raise has been sized with deliberate headroom against the
bottom-up plan. Total modelled funding need (base case) is R 2.62B; the
additional R 180M provides a buffer equal to approximately 9 months of
Y2 operating cash burn — sufficient to absorb a meaningful slippage in
either store openings or gross-margin trajectory without requiring a
follow-on raise.

Modelled need (base)

R 2.62B

Headroom buffer

R 180M

Buffer / Y2 burn

9 months

Peak ND/EBITDA

4.0x (Y3)

Figure 11.2

Figure 11.2 — Capital adequacy snapshot

11.8 Refinancing & Listing Strategy

On JSE listing (target month 60–66), the capital structure is
refinanced as follows:

Capital efficiency commitment

Management commits to a hard floor of R 250M in unrestricted
liquidity at all times, and to a “cash governance protocol” that
requires Board approval for any single capital commitment exceeding R
50M. The combination of staged drawdowns, conservative leverage, and
capital governance is designed to ensure that no further dilutive equity
raise is required between financial close and listing.

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 HealthPlus Retail Group (Pty) Ltd.