Cryostead Logistics — Funding Structure & Capital Requirements
The total capital requirement for Phase 1 is ZAR 140 million, structured as follows:
Section 14 · Business Plan
Funding Structure & Capital Requirements
The total capital requirement for Phase 1 is ZAR 140 million, structured as follows:
Deployed across land, the temperature-controlled facility, plant and equipment, targeting a 24–30% IRR and a 5–6 year payback.
14.1 Total Capital Requirement
The total capital requirement for Phase 1 is ZAR 140 million, structured as follows:
| Category | Amount (ZAR m) | % of Total | Source |
|---|---|---|---|
| Land & Construction | 70.0 | 50% | Debt + Equity |
| Refrigeration Systems | 40.0 | 29% | Debt |
| Equipment & Systems | 15.0 | 11% | Equity |
| Working Capital | 15.0 | 10% | Equity |
| Total | 140.0 | 100% |
14.2 Proposed Funding Mix
The Company proposes a funding structure comprising:
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Equity: ZAR 50 million (36%): To be raised from founding shareholders and Zimbali Capital Partners. Equity will fund working capital, equipment, and a portion of construction costs.
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Senior Secured Debt: ZAR 90 million (64%): Term loan from a South African commercial bank (anticipated ABSA, Standard Bank, or Nedbank) at prime minus 0.5% to prime plus 1.0%, secured by the property and equipment. Tenor of 10 years with a 2-year grace period on capital repayments.
The debt-to-equity ratio of approximately 1.8x at inception is consistent with infrastructure project financing norms in South Africa and provides adequate equity cushion for lender comfort. The Company anticipates that the debt service coverage ratio (DSCR) will exceed the minimum covenant threshold of 1.2x from Year 2 onwards.
14.3 Investor Return Profile
Equity investors in Cryostead can expect the following return characteristics:
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Internal Rate of Return (IRR): 24 to 30 percent under base case assumptions, reflecting the combination of capital appreciation and future dividend distributions.
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Cash-on-Cash Return: First dividend distribution anticipated in Year 4, with a targeted payout ratio of 30 to 40 percent of net profit thereafter.
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Multiple on Invested Capital (MOIC): Projected 2.5x to 3.2x over a 7-year investment horizon, assuming exit at 8x EBITDA.
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Downside Protection: The investment is secured by tangible physical assets (land, building, refrigeration equipment) with a depreciated replacement cost significantly exceeding the debt quantum.
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