This section presents the full re-underwritten ten-year financial model. Sponsor revenue and EBITDA are preserved exactly; depreciation, financing, tax, the balance sheet, cash flow, coverage and returns are independently derived, and the full net-profit path, which the sponsor provides only for stabilised Year 10, is built here. The model is fully integrated, the balance sheet reconciles to zero in every year, and denominated in US dollars. For readability, the projection tables are presented in two five-year blocks.
12.1 Key assumptions
|
Assumption |
Basis |
|---|---|
|
Revenue & EBITDA |
Sponsor 10-yr projections preserved ($20m→$550m; 10%→33% margin) |
|
Depreciation |
~11-yr blended life on the infrastructure & equipment base |
|
DFI senior debt |
$80m at 8.5%; 3-yr grace, amortising thereafter |
|
Working-capital facility |
$15m commercial line (sponsor-stated) — see finding below |
|
Tax |
27% with assessed-loss carry-forward (sponsor used 25%) |
|
Working capital |
Receivables-led (DSO ~52 days); light inventory |
|
Terminal value |
Exit at 4.0x EBITDA (conservative vs sponsor EV) |
|
Distributions |
Only once stabilised and de-levered (Year 7+) |
Table 12.1 Principal modelling assumptions.
12.2 Projected income statement
Years 1–5.
|
US$ million |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|---|---|---|---|---|---|
|
Revenue |
20 |
45.0 |
85.00 |
130.000 |
180.0000 |
|
Operating costs |
(18) |
(39) |
(70) |
(104) |
(139) |
|
EBITDA |
2 |
6.3 |
15.30 |
26.000 |
41.4000 |
|
Depreciation |
(6) |
(11) |
(14) |
(17) |
(21) |
|
EBIT |
(4) |
(4) |
1 |
9 |
20 |
|
Net interest |
(2) |
(4) |
(5) |
(6) |
(8) |
|
Profit before tax |
(6) |
(9) |
(4) |
2 |
12 |
|
Tax |
(0) |
(0) |
(0) |
(0) |
(0) |
|
Net profit (re-underwritten) |
(6) |
(9) |
(4) |
2 |
12 |
Years 6–10.
|
US$ million |
Year 6 |
Year 7 |
Year 8 |
Year 9 |
Year 10 |
|---|---|---|---|---|---|
|
Revenue |
240 |
310.0 |
390.00 |
470.000 |
550.0000 |
|
Operating costs |
(178) |
(223) |
(273) |
(324) |
(369) |
|
EBITDA |
62 |
86.8 |
117.00 |
145.700 |
181.5000 |
|
Depreciation |
(26) |
(30) |
(34) |
(37) |
(40) |
|
EBIT |
36 |
57 |
83 |
109 |
141 |
|
Net interest |
(9) |
(10) |
(10) |
(7) |
(3) |
|
Profit before tax |
27 |
47 |
74 |
102 |
139 |
|
Tax |
(6) |
(13) |
(20) |
(27) |
(37) |
|
Net profit (re-underwritten) |
21 |
34 |
54 |
74 |
101 |
Table 12.2 Projected income statement (re-underwritten below EBITDA). Losses shown in parentheses.
The Year-10 stabilised bridge shows the mature economics the whole build works toward: on $181m of EBITDA, depreciation and modest financing leave a healthy net profit, confirming that once the J-curve is passed the platform is strongly cash-generative. The task is to finance the journey to that point.
Key findingThe full profit path is re-underwritten — the sponsor showed only stabilised Year 10
The sponsor gives a net-profit line only for Year 10 ($79m). Re-underwriting all ten years, applying depreciation on the building asset base, cash interest, and 27% tax with loss carry-forward, shows net losses in Years 1–3 (about –$6m, –$9m, –$4m) turning to profit from Year 4 and reaching roughly $101m by Year 10.
Our Year-10 net profit ($101m) exceeds the sponsor’s ($79m) mainly because our modelled interest is lower, which ties directly to the capital finding below: if the additional capital needed to reach $550m of revenue is raised largely as debt, interest rises toward the sponsor’s figure and net profit converges on it. Either way, the early-year losses are the point investors must underwrite.
12.3 The J-curve & capital adequacy
Unlevered free cash flow is deeply negative in the early years (about –$68m and –$40m in Years 1–2), and cumulative cash reaches a trough of roughly –$143m before the business turns cash-generative. Against total committed funding of $180m, that leaves only modest headroom, and the modelled working-capital facility peaks well above the stated $15m to bridge the gap.
Key findingCapital adequacy is the central financial question — $180m funds Phases 1-2, not the full build
Two things point the same way. First, the cumulative-cash trough (about –$143m) sits close to the $180m of committed funding, and the working-capital facility is drawn well beyond its stated $15m in the model, so the base case already leaves little margin, and a downside would create a funding gap. Second, the sponsor’s own Year-10 depreciation (~$55m) implies an asset base far larger than $180m, consistent with reaching $550m of revenue only through substantial reinvestment and, realistically, further capital beyond the initial raise.
The honest reading: $180m funds Phases 1–2 and initiates Phase 3, with the continental build-out (acquisitions, pan-SADC network) requiring a subsequent capital plan. Lenders and investors should size committed funding, including standby facilities, to a stress-case trough, and treat the full-scale revenue trajectory as contingent on that additional capital being available. This is the single most important structuring issue in the transaction.
12.4 Projected balance sheet
Years 1–5.
|
US$ million |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|---|---|---|---|---|---|
|
Net PP&E |
64 |
99.3 |
122.10 |
142.400 |
164.7000 |
|
Receivables |
3 |
6.4 |
12.10 |
18.500 |
25.6000 |
|
Cash |
24 |
38.7 |
19.80 |
8.000 |
8.0000 |
|
Total assets |
91 |
145.0 |
155.10 |
170.600 |
200.6000 |
|
DFI senior debt |
45 |
70.0 |
80.00 |
72.000 |
64.0000 |
|
Working-capital facility |
0 |
0.0 |
0.00 |
16.700 |
37.6000 |
|
Payables |
2 |
4.2 |
7.60 |
11.400 |
15.2000 |
|
Deferred tax |
0 |
0.7 |
1.30 |
2.000 |
2.9000 |
|
Equity |
44 |
70 |
66 |
69 |
81 |
|
Total equity & liabilities |
91 |
145.0 |
155.10 |
170.600 |
200.6000 |
|
Balance check |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
Years 6–10.
|
US$ million |
Year 6 |
Year 7 |
Year 8 |
Year 9 |
Year 10 |
|---|---|---|---|---|---|
|
Net PP&E |
193 |
204.4 |
210.60 |
211.000 |
205.8000 |
|
Receivables |
34 |
44.2 |
55.60 |
67.000 |
78.4000 |
|
Cash |
8 |
8.0 |
8.00 |
8.000 |
69.7000 |
|
Total assets |
238 |
260.3 |
278.70 |
291.300 |
360.0000 |
|
DFI senior debt |
56 |
48.0 |
40.00 |
32.000 |
24.0000 |
|
Working-capital facility |
57 |
57.0 |
39.00 |
0.600 |
0.0000 |
|
Payables |
20 |
24.5 |
29.90 |
35.500 |
40.4000 |
|
Deferred tax |
4 |
5.2 |
6.50 |
8.000 |
9.6000 |
|
Equity |
102 |
126 |
163 |
215 |
286 |
|
Total equity & liabilities |
238 |
260.3 |
278.70 |
291.300 |
360.0000 |
|
Balance check |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
Table 12.3 Projected balance sheet. The balance-check row confirms the model ties to zero every year.
12.5 Projected cash-flow statement
Years 1–5.
|
US$ million |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|---|---|---|---|---|---|
|
Operating cash flow |
(1) |
1 |
8 |
17 |
31 |
|
Investing cash flow |
(70) |
(46) |
(37) |
(38) |
(44) |
|
Financing cash flow |
95 |
60 |
10 |
9 |
13 |
|
Net change in cash |
24 |
15 |
(19) |
(12) |
0 |
|
Unlevered FCF |
(68) |
(40) |
(21) |
(12) |
(2) |
|
Cumulative FCF |
(68) |
(108) |
(129) |
(141) |
(143) |
Years 6–10.
|
US$ million |
Year 6 |
Year 7 |
Year 8 |
Year 9 |
Year 10 |
|---|---|---|---|---|---|
|
Operating cash flow |
43 |
59 |
82 |
106 |
136 |
|
Investing cash flow |
(55) |
(41) |
(40) |
(37) |
(35) |
|
Financing cash flow |
11 |
(18) |
(42) |
(69) |
(39) |
|
Net change in cash |
0 |
0 |
0 |
0 |
62 |
|
Unlevered FCF |
1 |
33 |
57 |
81 |
109 |
|
Cumulative FCF |
(142) |
(109) |
(52) |
29 |
138 |
Table 12.4 Projected cash-flow statement. The cumulative-FCF row traces the J-curve.
12.6 Funding structure
The $180m committed stack is 47% equity ($60m infrastructure equity + $25m strategic/JV), with $80m of DFI senior debt and a $15m commercial working-capital facility. This is a genuinely robust equity base for a green-field infrastructure build, the equity is sized to absorb the early losses, which is exactly what a J-curve requires.
StrengthThe equity base is a real strength — unusually for a plan of this scale
In contrast to many infrastructure proposals, Aurex is not under-equitised: at 47%, the equity is sized to absorb several years of negative cash flow before the business turns. This materially de-risks the early period for lenders and is a genuine credit strength. The caveat is not the equity ratio but the absolute quantum: the $180m in total is calibrated to Phases 1–2, so while the mix is right, the total will need to grow to fund the full continental build.
12.7 Debt profile & coverage
Years 1–5.
|
Metric |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|---|---|---|---|---|---|
|
CFADS (US$ m) |
2 |
5 |
14 |
23 |
38 |
|
Debt service (US$ m) |
2 |
4.9 |
6.40 |
14.800 |
14.1000 |
|
DSCR |
0.84x |
1.10x |
2.12x |
1.58x |
2.68x |
|
Gross debt / EBITDA |
22.50x |
11.11x |
5.23x |
3.41x |
2.45x |
|
Gearing (%) |
50.7% |
50.0% |
54.7% |
56.4% |
55.7% |
Years 6–10.
|
Metric |
Year 6 |
Year 7 |
Year 8 |
Year 9 |
Year 10 |
|---|---|---|---|---|---|
|
CFADS (US$ m) |
51 |
68 |
89 |
109 |
133 |
|
Debt service (US$ m) |
13 |
12.8 |
12.10 |
11.400 |
10.7000 |
|
DSCR |
3.84x |
5.31x |
7.37x |
9.55x |
12.44x |
|
Gross debt / EBITDA |
1.81x |
1.21x |
0.68x |
0.22x |
0.13x |
|
Gearing (%) |
52.6% |
45.5% |
32.6% |
13.2% |
7.7% |
Table 12.5 Coverage and leverage. Senior debt carries a three-year construction grace.
Key findingCoverage is thin during the ramp, then very strong — typical of infrastructure
During the construction and ramp years, coverage is thin: with EBITDA small and rising, early DSCR is around or below 1.0x, which is why the three-year principal grace and a funded debt-service reserve are essential, early service is met from reserves and the equity buffer, not operations. This is normal for green-field infrastructure but must be structured explicitly.
From roughly Year 4–5 onward, coverage strengthens rapidly as EBITDA scales, with DSCR moving well above covenant levels and gross debt/EBITDA de-levering below 1.0x by Year 8. The credit profile therefore transforms from reserve-supported in the build to strongly self-supporting at maturity, provided the ramp arrives on schedule.
12.8 Break-even & scenarios
|
Scenario |
Y10 revenue |
Y10 EBITDA |
Assessment |
|---|---|---|---|
|
Upside |
$605m |
$218m |
Faster ramp, stronger rail shift |
|
Base case |
$550m |
$182m |
Sponsor plan preserved |
|
Downside |
$440m |
$128m |
–20% volume, –4pp margin |
Table 12.6 Scenario summary (Year 10).
12.9 Project returns & valuation
|
Return metric |
Base case |
Conservative |
Sponsor |
|---|---|---|---|
|
Project IRR |
28.1% |
26.8% |
19–24% |
|
Project NPV @ 11.5% (US$ m) |
234 |
204 |
— |
|
Exit equity value (US$ m) |
772 |
— |
800–950 |
|
Payback (cumulative FCF) |
~Year 9 |
~Year 9 |
~7 years |
Table 12.7 Project returns and valuation. Terminal at 4.0x Year-10 EBITDA (conservative versus the sponsor’s implied ~6x EV).
StrengthReturns clear the cost of capital and corroborate the sponsor’s valuation
On the re-underwritten cash flows, the base-case project IRR of ~28% (and ~27% on a conservative terminal) comfortably clears the 11.5% cost of capital and meets or exceeds the sponsor’s 19–24% target, while the exit equity value of roughly $772m corroborates the sponsor’s $800–950m range. The important qualification is capital: these returns assume the $550m trajectory is reached, which depends on the additional Phase-3 capital discussed above. Financed adequately, the economics are genuinely attractive for patient infrastructure capital; under-financed, the ramp, and hence the returns, is at risk.
12.10 Base-case KPI dashboard
Years 1–5.
|
KPI |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|---|---|---|---|---|---|
|
Revenue growth |
— |
125% |
89% |
53% |
38% |
|
EBITDA margin |
10% |
14% |
18% |
20% |
23% |
|
Net margin |
-31.5% |
-19.1% |
-4.6% |
1.8% |
6.9% |
|
Throughput (Mt) |
0.4 |
0.9 |
1.7 |
2.5 |
3.3 |
|
Rail share (%) |
15% |
20% |
26% |
32% |
38% |
|
DSCR |
0.84x |
1.10x |
2.12x |
1.58x |
2.68x |
|
Cumulative FCF (US$ m) |
(68) |
(108) |
(129) |
(141) |
(143) |
Years 6–10.
|
KPI |
Year 6 |
Year 7 |
Year 8 |
Year 9 |
Year 10 |
|---|---|---|---|---|---|
|
Revenue growth |
33% |
29% |
26% |
21% |
17% |
|
EBITDA margin |
26% |
28% |
30% |
31% |
33% |
|
Net margin |
8.7% |
11.0% |
13.8% |
15.8% |
18.4% |
|
Throughput (Mt) |
4.2 |
5.2 |
6.2 |
7.1 |
8.0 |
|
Rail share (%) |
44% |
50% |
55% |
58% |
60% |
|
DSCR |
3.84x |
5.31x |
7.37x |
9.55x |
12.44x |
|
Cumulative FCF (US$ m) |
(142) |
(109) |
(52) |
29 |
138 |
Table 12.8 Base-case key performance indicators.
12.11 Covenant & lender-protection framework
The financing is structured to protect lenders through the J-curve and to give the DFI-led consortium the monitorable controls appropriate to a long-dated, multi-country infrastructure build.
|
Protection |
Proposed structure |
|---|---|
|
Construction grace |
Interest-only on senior debt through Years 1–3 |
|
Debt-service reserve |
DSRA funded to ~20m (forward debt service) |
|
Minimum DSCR covenant |
≥ 1.30x, tested from stabilisation (post-grace) |
|
Milestone drawdowns |
Capital released against verified construction milestones |
|
Standby / contingent capital |
Committed facilities sized to a stress-case trough |
|
Anchor-contract conditions |
Minimum anchor volumes as drawdown conditions |
|
Security |
Terminals, depots, yards, fleet, receivables, share pledges |
|
Distribution lock-up |
No distributions until stabilised, de-levered and reserves met |
Table 12.9 Proposed covenant and lender-protection framework.
StrengthThe structure should be built around the J-curve and the capital plan
The right lender-protection framework for Aurex focuses on the build and ramp: interest-only grace and a funded debt-service reserve carry the early years; milestone-gated drawdowns and anchor-volume conditions prevent capital release ahead of de-risking; and, most importantly, committed standby capital sized to a stress-case trough closes the adequacy gap the base case exposes. With the substantial tangible-asset security and the strong stabilised cash flows, a facility structured this way is well-protected; the key is to structure explicitly for the J-curve rather than the Year-10 snapshot.