Golden Range Poultry Business Plan — Funding Requirement & Capital Structure

Sources and uses

Uses	R m	Sources	R m
Land	18	Agri term debt	85
Poultry houses	52	Equity	80
Hatchery	15
Processing plant	36
Cold storage	10
Vehicles	9
Solar plant	11
Working capital	14
Total	165	Total	165

Figure 21. *Use of funds across the R165m raise.*

Capital structure and funding

The R165 million is structured as R85 million of agri term debt, secured against the land, houses and plant at roughly 12.0%, and R80 million of equity, a conservative gearing for an agricultural build. This funds the complete integrated platform: land, poultry houses, hatchery, processing plant, cold storage, vehicles, solar and working capital. A modest follow-on equity draw of roughly R13 million across the ramp maintains minimum liquidity; committed follow-on capital or an undrawn working-capital facility is recommended to protect the plan against construction, offtake and feed-cost timing.

Debt service and covenant headroom

Credit metric	Year 1	Year 2	Year 3	Year 4	Year 5
Agri term debt (R m)	85	88	89	85	79
Debt service (R m)	10.2	21.6	21.8	20.7	19.4
DSCR (x)	1.08×	1.62×	3.07×	5.02×	7.47×
Interest cover (x)	1.1×	3.0×	5.6×	9.2×	13.7×
Net debt / EBITDA (x)	7.0×	2.3×	1.1×	0.3×	(0.3)×

Figure 22. *Agri term debt and debt-service cover.*

Analyst flagYear-1 debt-service cover is tight — reserves and a grace period matter

At the start of the ramp, Year-1 debt-service cover is only about 1.08× as the facility carries full financing on partial output, before strengthening rapidly to comfortable levels (well above 3× from Year 3) as utilisation climbs. This is a ramp-timing issue, not a solvency one, but it must be managed, through a debt-service reserve, a grace or interest-only period on the term debt during construction and early ramp, covenant headroom, and the committed follow-on liquidity already built into the plan. Lenders should size facilities and covenants to this profile.

Recommended structure

A grace / interest-only period on the term debt through construction and early ramp to bridge the Year-1 cover trough.
A debt-service reserve account and committed follow-on equity or working-capital facility sized to the true peak funding need of the ramp.
Offtake-linked draw-down, gating house-capacity expansion on demonstrated retail and food-service offtake.
A feed-price hedging policy and flock insurance as conditions precedent, given feed-cost and disease exposure.