CluckCore Integrated Poultry Group — Funding Requirement & Capital Structure
The R1.25 billion raise, the implementation budget, the covenant package, the debt-service-coverage schedule and the funding partners underpinning CluckCore.
Section 22 · Business Plan
Funding Requirement & Capital Structure
The R1.25 billion raise, the implementation budget, the covenant package, the debt-service-coverage schedule and the funding partners underpinning CluckCore.
The R1.25 billion raise
| Instrument | Amount (Rm) | Terms (indicative) | Purpose |
|---|---|---|---|
| Ordinary equity | 500 | Priced round at close; board seats | First-loss capital; abattoir & launch |
| Term debt (senior + IDC) | up to 750 | ~9.5–11.75%; secured on plant; IDC concessional tranche | Fixed capex; drawn as built |
| — of which working-capital facility | revolving | ~12.5%; secured on inventory & receivables | Feed, live-bird, finished inventory, farmer advances |
| Total raise | 1,250 | — | As per use-of-funds |
| Capital actually deployed (FY2031) | ≈ 699 | R500m equity + ~R199m peak debt | Balance is idle — see recommendation |
Implementation budget detail
| Category | Allocation (Rm) | % of raise | What it funds |
|---|---|---|---|
| Abattoir infrastructure | 520 | 42% | Slaughter lines, processing halls, chilling, civils |
| Cold-chain logistics | 220 | 18% | Refrigerated fleet, storage hubs, IoT cold-chain |
| Working capital | 180 | 14% | Feed, live-bird & finished inventory, receivables |
| Farmer-support programme | 160 | 13% | Revolving input advances to contract farmers |
| Equipment & automation | 120 | 10% | Slaughter automation, ERP, traceability, IT |
| Distribution expansion | 50 | 4% | Routes, depots, market development |
| Total | 1,250 | 100% | — |
The allocation is sensibly weighted to the abattoir and cold chain
(the productive core), but note that R340 million, working
capital plus farmer support, is revolving capital, not sunk
capex. Combined with the modelling finding that peak debt drawn
is only ~R199 million, this reinforces the right-sizing recommendation:
much of the raise funds a working-capital buffer that a
committed-but-undrawn facility could provide more efficiently than
fully-drawn equity and debt sitting as idle cash.
RAISE
On our modelling, a raise of roughly R700–800 million (rather than
R1.25 billion) would fully fund the plan with a sensible liquidity
buffer, while lifting return on invested capital materially. If the
sponsor’s larger raise is retained, for instance to pre-fund Phase-3
abattoirs or a bigger working-capital buffer against feed/HPAI shocks,
that rationale should be made explicit to investors, because otherwise
the idle capital depresses returns and invites the question the
diligence will ask anyway. Our recommendation: raise R500m equity plus a
committed-but-undrawn R300m working-capital facility, and defer Phase-3
term debt until the milestones that gate it.
Indicative covenant package
| Covenant | Threshold | Plan position |
|---|---|---|
| Net debt / EBITDA | ≤ 3.0x | Peaks 1.7x (FY2028); net cash thereafter |
| EBITDA interest cover | ≥ 3.0x | ≥ 7.8x throughout |
| Debt / equity | ≤ 1.0x | ≤ 0.33x |
| Abattoir utilisation | ≥ 65% (build phase) | Primary operating covenant |
| Margin-over-feed per kg | ≥ agreed floor | Early-warning on feed/margin squeeze |
| Food-safety / FSA standing | Good standing maintained | Binary gate, loss halts operations |
Debt service coverage schedule
Term debt carries a short grace period during construction and
commissioning, converting to amortising once the abattoir generates
cash. Given the plan’s low leverage, coverage is comfortable
throughout.
| R million | FY2027 | FY2028 | FY2029 | FY2030 | FY2031 |
|---|---|---|---|---|---|
| CFADS (EBITDA − tax − ΔWC − Δadvances) | (39) | 27 | 121 | 284 | 613 |
| Interest | — | 8 | 20 | 23 | 23 |
| Principal (amortisation) | — (grace) | — (grace) | 33 | 33 | 33 |
| Total debt service | — | 8 | 53 | 56 | 56 |
| DSCR (×) | n/m | 3.25 | 2.30 | 5.09 | 10.98 |
DSCR is not the binding constraint in this plan — the low
leverage sees to that. The binding constraints are operational (abattoir
utilisation, margin-over-feed) and event-driven (HPAI), which is why the
covenant package leads with utilisation and margin-over-feed floors
rather than pure balance-sheet ratios.
Funding partners
The developmental, food-security profile positions CluckCore for
blended agri-finance. Target partners: the IDC and DBSA for concessional
term debt and DFI tranches; commercial agricultural banks (Land Bank,
Absa AgriBusiness, Standard Bank, Nedbank) for senior and
working-capital facilities; and agri-focused private equity and
food-security impact investors for the equity round.
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 CluckCore Integrated Poultry Group (Pty) Ltd.