Aurora Downstream Energy — Executive Summary

The business overview, the opportunity, the funding requirement, the financial highlights, the returns and bankability and why Aurora Energy.

Section 1 · Business Plan

Executive Summary

The business overview, the opportunity, the funding requirement, the financial highlights, the returns and bankability and why Aurora Energy.

1.1 Business overview

Aurora Downstream Energy (Pty) Ltd is a South African integrated
downstream energy company established to source, store, distribute and
retail liquefied petroleum gas (LPG), petroleum fuels and related energy
products and services. The Company is building a vertically integrated
platform that spans secured import and storage capacity, cylinder
filling and bulk blending, an owned-and-contracted distribution fleet,
and last-mile delivery to residential, commercial, industrial,
agricultural and mining customers across the country’s four largest
demand provinces.

The strategic thesis is straightforward. South Africa’s liquid-fuels
system has shifted structurally from domestic refining toward imports,
while LPG demand is being actively promoted by national energy policy as
a cleaner, safer alternative to paraffin and biomass. Existing supply is
concentrated among a small number of incumbents and is constrained by
ageing infrastructure and a widening import gap. Aurora Energy is
positioned as a credible, well-capitalised challenger that combines
secured terminal access with disciplined logistics and an LPG-led,
margin-accretive product mix — mirroring the integrated model proven by
established African operators such as Oryx Energies, Rubis (Easigas) and
TotalEnergies, but engineered for capital efficiency and rapid market
entry.

1.2 The opportunity

South Africa consumes under 500,000 tonnes of LPG per year, yet
domestic refinery output has roughly halved since 2020 following the
closure of major Durban refining capacity, leaving the market
increasingly dependent on imports. National policy — articulated through
the draft Gas Master Plan — targets a doubling of LPG consumption over
five years, alongside local cylinder and appliance manufacturing.
Per-capita LPG use remains a fraction of comparable middle-income
economies, signalling substantial latent demand. In parallel, diesel
dominates a ~30 billion-litre-per-year liquid-fuels market, underpinned
by structural demand from mining, transport, agriculture and back-up
power generation amid grid instability.

These dynamics create a durable, multi-decade demand backdrop with a
clear infrastructure and last-mile gap that a focused, well-funded
operator can capture profitably while delivering measurable development
and decarbonisation impact.

Figure 1

Figure 1. Five-year revenue build by segment, led by LPG distribution with diversified fuel-trading and logistics streams.

1.3 Funding requirement

Aurora Energy is seeking total capital of R780m (approximately USD
47.3 million), comprising R450m of equity and a R330m senior term debt
facility, supported by a funded debt-service reserve and a separate
R250m working-capital revolver for inventory and receivables financing.
The capital programme funds storage and depot infrastructure, cylinder
filling and blending capacity, distribution fleet and the cylinder pool,
and enabling technology, safety and compliance systems.

Table 1. Sources and indicative uses of funds
(R’m)

Sources	R’m	Uses	R’m
Equity (ordinary + DFI)	450	Storage terminals & depots	333
Senior term debt	330	Bottling & blending plant	172
Debt-service reserve (DSRA)	30	Fleet & cylinder pool	162
		IT, safety & compliance	83
		Debt-service reserve	30
Total capital raise	780	Total application	780

A separate R250m working-capital revolver (committed, not part of
the capital raise above) finances the inventory and receivables required
to support trading volumes; it is ring-fenced from senior-debt cover
ratios.

1.4 Financial highlights

The base-case model projects revenue growing from R741m in Year 1 to
R3,027m by Year 5, a compound annual growth rate of approximately 42%.
EBITDA scales from a modest commissioning-year R19m to R365m (a 12.1%
margin), reflecting the operating leverage of an integrated,
asset-backed platform. Year 1 is deliberately modelled as a
commissioning year with a net loss, consistent with infrastructure
ramp-up; the business reaches sustainable profitability from Year 3.

Table 2. Key financial metrics summary (R’m
unless stated)

Metric	FY2026	FY2027	FY2028	FY2029	FY2030
Revenue	741	1,413	2,045	2,558	3,027
Gross profit	119	253	386	494	589
EBITDA	19	111	208	292	365
EBITDA margin	2.5%	7.8%	10.2%	11.4%	12.1%
Net profit after tax	(62)	11	82	128	181
DSCR (senior debt)	-0.34x	1.70x	1.51x	2.11x	2.88x
Net debt / EBITDA	2.64x	1.82x	1.21x	0.75x	0.43x

Figure 2

Figure 2. Profitability progression: EBITDA, EBIT and net profit after tax move firmly positive from Year 3.

1.5 Returns & bankability

The proposed structure is engineered to be bankable. After a 24-month
capital-repayment grace period, the senior debt-service cover ratio
(DSCR) ranges from 1.51x to 2.88x in the base case, comfortably above a
1.30x covenant floor, while gearing de-levers from 51.4% to 39.9% and
net debt/EBITDA falls below 0.5x by Year 5. For equity investors, the
base case indicates an equity internal rate of return of approximately
34% and a money multiple of around 4.2x over a five-year horizon, with a
five-year exit assumed at 5.0x EV/EBITDA.

Analyst note — returns are a base case, not a
forecast

These returns are attractive but assumption-sensitive and should be
treated as a base case, not a forecast. The headline equity IRR reflects
a successful greenfield build executed on a capital-light
terminal-access strategy and is materially dependent on volume ramp,
blended margins, the ZAR/USD rate and the assumed exit multiple. Under
the modelled downside scenario the equity IRR compresses to roughly 19%
and senior DSCR falls below covenant in a single year (cured by the
funded reserve); under severe stress it falls further. Lenders should
anchor on the cover ratios and the funded debt-service reserve; equity
investors should independently validate volume, margin and exit
assumptions.

1.6 Why Aurora Energy

Structural tailwinds: a policy-backed drive to
expand LPG, a widening domestic supply gap, and resilient diesel demand
from mining, transport and back-up power.
Capital-efficient entry: secured throughput at
existing import terminals plus owned secondary storage, bottling and
fleet, avoiding the cost and lead-time of a greenfield import
terminal.
Integrated margin capture: control of the chain
from import to last mile, with an LPG-led mix that lifts blended margins
above pure fuel trading.
Bankable structure: conservative gearing, a
24-month grace period, a funded debt-service reserve and a ring-fenced
working-capital revolver.
Development impact: cleaner-energy access for
under-served households, local job creation, and measurable displacement
of paraffin and biomass — aligning the Company with DFI mandates and
national policy.

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 Aurora Downstream Energy (Pty) Ltd.