Ferrovanta Mining Services — Financial Plan and Capital Structure
The ZAR 9.5 billion capital structure, the funding plan across equity and senior debt, the use of proceeds, the key financial assumptions and the leverage and coverage profile.
Section 13 · Business Plan
Financial Plan and Capital Structure
The ZAR 9.5 billion capital structure, the funding plan across equity and senior debt, the use of proceeds, the key financial assumptions and the leverage and coverage profile.
13.1 Financial Plan Overview
This section presents the integrated 7-year financial plan for
Ferrovanta Mining Services. The plan has been constructed from a
bottom-up operating model: fleet build-up drives material movement
capacity; material movement capacity drives revenue at contractually
agreed rates; cost-per-BCM benchmarks drive operating cost; and the
resulting EBITDA is rolled into a fully integrated three-statement model
linking the profit and loss statement, balance sheet, and cash flow
statement.
All projections are presented in nominal South African Rand. The
model has been built with documented assumptions allowing each line item
to be sensitivity-tested. The principal output statements (P&L,
Balance Sheet, Cash Flow) are presented in Sections 14, 15, and 16
respectively.
13.2 Key Modelling Assumptions
| Assumption Category | Base Case Value | Source / Rationale |
|---|---|---|
| Inflation (CPI, ZAR) | 5.0% p.a. | SARB Monetary Policy Target midpoint |
| ZAR/USD exchange rate (assumed average) | 18.50 → 21.00 over 7 years | Forward curve and IMF projections |
| Diesel price growth | 6.5% p.a. average | Sasol commercial diesel historical |
| Wage inflation | 6.0% p.a. | Mining Bargaining Council historical settlements |
| Corporate tax rate (SA) | 27.0% | Income Tax Act, current rate |
| Senior debt interest rate | Prime + 1.75% | Indicative term sheet from SA Big-4 banks |
| Mezzanine interest rate | Prime + 4.50% | Negotiated indicative pricing |
| Equipment finance lease rate | Prime + 2.00% | OEM finance partners |
| Asset depreciation — heavy mining | 8 years straight-line | Useful life convention; IFRS |
| Asset depreciation — ancillary | 5 years straight-line | Useful life convention |
| Working capital — debtor days | 55 days | Industry benchmark |
| Working capital — creditor days | 45 days | Industry benchmark |
| Working capital — inventory days (parts/fuel) | 30 days | Industry benchmark |
13.3 Capital Structure
The capital structure is designed to (i) match asset durations with
funding durations, (ii) maintain a Debt Service Coverage Ratio
comfortably above lender covenant thresholds throughout the plan period,
(iii) deliver attractive equity returns through reasonable financial
leverage, and (iv) preserve flexibility for refinancing as the business
deleverages. The blended cost of capital at financial close is
approximately 14.2% (after tax).
13.4 Detailed Funding Stack
| Tranche | Amount (ZAR m) | Tenor | Indicative Pricing | Targeted Provider |
|---|---|---|---|---|
| Senior Debt — Term Loan A | 2,500 | 7 years | Prime + 1.75% | SA commercial banks (RMB, SBSA, Absa) |
| Senior Debt — DFI Tranche | 1,000 | 10 years | Prime + 1.50% | DBSA / IFC / AfDB |
| Mezzanine Note | 1,000 | 8 years | Prime + 4.50% + warrants | Mezzanine / mining-finance specialists |
| Equipment Finance Leasing | 2,000 | 5-7 years | Prime + 2.00% | OEM captive finance + leasing banks |
| Strategic / PE Equity | 2,500 | — | — | DFI equity / mining-sector PE funds |
| Sponsor / Founder Equity | 500 | — | — | Founding management and IDC |
| Total Raise | 9,500 | Blended cost: ~14.2% (after tax) |
13.5 Debt Service and Covenants
Senior debt holders are protected by a documented covenant package
modelled on standard South African project-finance practice. The Company
will commit to (i) a minimum Debt Service Coverage Ratio (DSCR) of
1.25x, tested half-yearly; (ii) a minimum interest coverage ratio of
3.0x; (iii) a maximum Net Debt / EBITDA ratio of 4.5x in Years 1-2,
reducing to 3.0x by Year 4; (iv) restrictions on additional
indebtedness, dividends, and material asset disposals while senior debt
remains outstanding; and (v) defined reporting covenants including
monthly management accounts and quarterly compliance certificates.
The DSCR trajectory shows comfortable cushion above the 1.25x
covenant from Year 1, rising to in excess of 4.0x by Year 7. Outstanding
debt initially rises in Year 2 reflecting incremental equipment
financing drawdowns before commencing a structured amortisation profile
from Year 3 onward.
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 Ferrovanta Mining Services (Pty) Ltd.