Evergreen Valley Avocado Estates — Funding Structure & Capital Requirements
The total funding requirement of R70 million will be raised through a combination of equity investment and debt financing, structured to optimise the cost of capital while maintaining prudent leverage levels for an agricultural enterprise.
Section 18 · Business Plan
Funding Structure & Capital Requirements
The total funding requirement of R70 million will be raised through a combination of equity investment and debt financing, structured to optimise the cost of capital while maintaining prudent leverage levels for an agricultural enterprise.
Funding the land, orchard establishment, irrigation, packhouse and working capital through the establishment phase to maturity.
18.1 Capital Structure
The total funding requirement of R70 million will be raised through a combination of equity investment and debt financing, structured to optimise the cost of capital while maintaining prudent leverage levels for an agricultural enterprise.
| Funding Source | Amount (R’000) | % of Total | Terms |
|---|---|---|---|
| Equity – Founder & Management | 25,000 | 35.7% | Ordinary shares; no fixed return |
| Equity – Strategic Investor | 15,000 | 21.4% | Ordinary shares; board representation |
| Development Finance (DBSA / IDC) | 15,000 | 21.4% | 8–10 year term; concessionary rate |
| Commercial Bank (Agri-finance) | 10,000 | 14.3% | 7 year term; prime + 1.5% |
| Working Capital Facility | 5,000 | 7.1% | Revolving; prime + 2% |
| TOTAL | 70,000 | 100% |
18.2 Use of Funds
| Category | Year 1 (R’000) | Year 2 (R’000) | Year 3 (R’000) | Total (R’000) |
|---|---|---|---|---|
| Land Acquisition | 25,000 | 0 | 0 | 25,000 |
| Orchard Establishment | 8,000 | 8,000 | 4,000 | 20,000 |
| Irrigation Systems | 4,000 | 3,500 | 2,500 | 10,000 |
| Farm Infrastructure | 6,000 | 2,000 | 0 | 8,000 |
| Working Capital & Operating | 2,000 | 2,500 | 2,500 | 7,000 |
| TOTAL | 45,000 | 16,000 | 9,000 | 70,000 |
18.3 Debt Repayment Schedule
Long-term debt repayment is scheduled to commence in Year 4, once the orchards are generating commercial revenues. The repayment schedule is structured as follows:
| Year | Opening Balance (R’000) | Repayment (R’000) | Interest (R’000) | Closing Balance (R’000) |
|---|---|---|---|---|
| Year 1 | 25,000 | 0 | (2,100) | 25,000 |
| Year 2 | 25,000 | 0 | (2,100) | 25,000 |
| Year 3 | 30,000 | 0 | (2,100) | 30,000 |
| Year 4 | 30,000 | (5,000) | (1,800) | 25,000 |
| Year 5 | 25,000 | (5,000) | (1,500) | 20,000 |
| Year 6 | 20,000 | (5,000) | (1,200) | 15,000 |
| Year 7 | 15,000 | (5,000) | (900) | 10,000 |
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