Evergreen Valley Avocado Estates (Pty) Ltd Business Plan › Funding Strategy & Capital Structure

15.1 Total Funding Requirement

15.2 Debt Structure

Development finance will be sourced from institutions such as the Land and Agricultural Development Bank of South Africa (Land Bank), the Industrial Development Corporation (IDC), or the Development Bank of Southern Africa (DBSA). These institutions offer concessionary interest rates and extended tenors suited to agricultural projects with long gestation periods.

• Term Loan: R25 million at estimated Prime + 1.0% (12.5%), 10-year tenor, 3-year capital moratorium

• Revolving Credit Facility: R10 million from a commercial bank (ABSA, FNB, Nedbank, or Standard Bank agricultural division) for seasonal working capital requirements

15.3 Security Package

• First mortgage bond over the farm property (valued at R25m+)

• General notarial bond over movable assets (irrigation, equipment, vehicles)

• Cession of crop insurance proceeds

• Cession of packhouse offtake agreements and receivables

• Personal suretyships from founding shareholders

15.4 Exit Strategy

The investment offers multiple potential exit routes for equity investors:

• Trade sale to a strategic buyer (major South African or international avocado producer/packer)

• Management buyout funded by operational cash flows and refinanced debt

• Partial exit through introduction of a new strategic equity partner at the expansion phase

• Long-term hold with annual dividend distributions (target 30–40% payout ratio from Year 5 onwards)

This document contains proprietary and confidential information. Distribution without written consent is prohibited.