Bloomhouse Florals — Funding Structure, Debt & Covenants
The R12.0 million funding structure across equity and debt, the gearing, the debt-service profile, the covenants and the detailed use of proceeds.
Section 15 · Business Plan
Funding Structure, Debt & Covenants
The R12.0 million funding structure across equity and debt, the gearing, the debt-service profile, the covenants and the detailed use of proceeds.
The R12.0 million raise is structured to balance cost of capital
against early-stage resilience: a majority-equity capital structure, a
senior term loan with a capital grace period, asset finance secured on
the fleet and cold chain, a funded debt-service reserve and a committed
but undrawn revolving facility. The structure is designed to be
financeable by a combination of equity investors, a commercial lender
and, potentially, a development-finance institution.
15.1 Sources and uses
| Sources of funds | R’m | Share |
|---|---|---|
| Equity — sponsor | 3.6 | 30.0% |
| Equity — investor | 3.0 | 25.0% |
| Senior term loan | 3.6 | 30.0% |
| Asset finance | 1.8 | 15.0% |
| Total sources | 12.0 | 100% |
Table 26. Sources of funds. The structure is 55%
equity / 45% debt.
| Uses of funds | R’m | Share |
|---|---|---|
| Initial capital expenditure | 8.8 | 73.3% |
| Opening liquidity buffer (working capital) | 3.2 | 26.7% |
| Debt-service reserve account | 0.25 | 2.1% |
| Total uses | 12.25 | ≈100% |
Table 27. Uses of funds. The balance of the
raise after capex is held as working-capital buffer and a funded
debt-service reserve.
15.2 Debt terms
The senior term loan of R3.6m is priced at 13.75% with a 24-month
capital grace period, so only interest is payable while the business
ramps, after which capital amortises. The asset-finance facility of
R1.8m, priced at 13%, is secured on the refrigerated fleet and
cold-chain equipment and amortises from Year 1. A committed revolving
facility of R1.5m at 14.5% is available for contingency and is undrawn
in the base case.
15.3 Debt-service schedule
| R’ millions | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Opening debt | R5.40m | R5.04m | R4.68m | R3.72m | R2.76m |
| Interest | R0.73m | R0.68m | R0.64m | R0.51m | R0.38m |
| Principal repaid | R0.36m | R0.36m | R0.96m | R0.96m | R0.96m |
| Total debt service | R1.09m | R1.04m | R1.60m | R1.47m | R1.34m |
| Closing debt | R5.04m | R4.68m | R3.72m | R2.76m | R1.80m |
Table 28. Debt-service schedule. The 24-month
grace on senior capital is visible in the Year-1–2 principal line; total
debt amortises from R5.4m to R1.8m.
15.4 Coverage and covenants
Debt-service cover builds quickly once the grace period and ramp are
behind the business. On an EBITDA basis cover rises from interest-only
cover in Year 1 to comfortably above a typical 1.25x covenant from Year
2 onward; on a stricter cash-flow-available-for-debt-service (CFADS)
basis the same pattern holds. The chart and table below set out the
coverage profile.
| Coverage metric | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| DSCR (EBITDA basis) | 0.09x | 1.31x | 1.93x | 3.61x | 5.92x |
| DSCR (CFADS basis) | 0.09x | 1.02x | 1.92x | 2.59x | 4.64x |
| Interest cover (EBIT basis) | -2.26x | -0.63x | 1.38x | 6.44x | 15.37x |
Table 29. Coverage ratios. Year-1 cover is below
1.0x by design during the grace period and ramp; cover builds rapidly
thereafter.
post-grace profile
Because debt-service cover is intentionally below 1.0x in Year 1
during the capital grace period, a conventional 1.25x DSCR covenant
should apply from Year 2, supported by a minimum-cash covenant of R0.4m
and the funded debt-service reserve. This structure gives the lender
meaningful protection while allowing the business the room it needs to
establish itself. The undrawn revolver and the reserve together provide
more than R1.7m of contingent liquidity.
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 Bloomhouse Florals (Pty) Ltd.