This document is a business plan presented in the form of an investment memorandum. It has been prepared to allow a sophisticated investor, lender or investment committee to evaluate a proposed greenfield peanut butter and groundnut processing venture in Lichtenburg, North West Province.

What this document is

• A decision document. Every section is written to support or challenge an investment decision. Descriptive material that does not bear on that decision has been excluded.
• Model-driven. All financial figures in the text, tables and exhibits are produced by a single integrated monthly three-statement model covering 132 months from financial close. The income statement, balance sheet, cash flow statement, debt schedule, capital expenditure schedule, tax computation and working capital schedule reconcile in every period. The balance sheet balances to within one rand in every month of every scenario.
• Intellectually honest. Where the analysis is unflattering it is stated plainly and placed prominently. The venture’s negative return on invested capital in Years 1 to 3, its failure to cover its cost of capital until Year 9, the near-total loss of equity value in the downside case, and the very narrow debt service covenant headroom are all set out in the body of the document rather than in footnotes.

What this document is not

• Not an offer. Nothing in this document constitutes an offer to sell or a solicitation of an offer to buy securities. Any investment would be made only on the terms of definitive legal documentation.
• Not audited. The financial projections are forecasts based on stated assumptions. They have not been audited, reviewed or reported on by an independent accountant. Actual results will differ, and the scenario analysis in Section 30 indicates by how much.
• Not a substitute for diligence. Market sizing, competitor positioning and pricing rest on published sources and reasoned estimates rather than commissioned primary research. The conditions precedent in Section 27 identify what must be verified before capital is committed.

Currency, dates and conventions

• All amounts are in South African rand. Tables are in thousands (R million) unless stated; narrative figures are generally in millions.
• The financial year ends on 28 or 29 February, aligning the company’s reporting period with the South African groundnut marketing season, which runs from 1 March to the end of February.
• Financial close is assumed on 1 March 2027. FY2028 is the construction and commissioning year. FY2029 is Operating Year 1 and FY2033 is Operating Year 5. The model extends to FY2038, Operating Year 10, because a five-year truncation of a fifteen-year industrial asset materially understates its value.
• Prices and costs are stated in Year 1 real terms where marked; all modelled financial statements are in nominal terms with separate escalation rates applied to prices, groundnuts, other costs and wages.
• Volumes are expressed in tonnes of finished product unless described as in-shell or kernel weight.