Meridian Industrial Group Business Plan — Financial Plan

This section presents the complete three-statement financial model, projected profit and loss, balance sheet and cash flow, together with the funding structure, debt-service analysis and sensitivities. The model is internally consistent: the balance sheet ties to zero in every year, and every table and chart in this Plan derives from a single source of truth.

Modelling philosophy and key assumptions

Consistent with bankability standards, the model preserves the sponsor’s headline revenue and EBITDA exactly, then re-derives everything below EBITDA from first principles. Depreciation is computed bottom-up from a component capital-expenditure schedule with asset-class-specific useful lives; interest is charged on the actual drawn-debt balance at a blended 11.5%; and tax is levied at the 27% South African corporate rate, applying the post-2022 assessed-loss carry-forward rule under which brought-forward losses may offset no more than 80% of taxable income.

Assumption	Basis
Revenue & EBITDA	Sponsor targets, preserved exactly
Corporate tax rate	27% (SA), with 80% assessed-loss set-off cap
Blended cost of debt	11.5% (prime 10.5% + ~100bps)
Capital structure	~60% senior debt / ~40% equity
Working capital	13% of revenue; change funded from operations
Dividend policy	30% of positive net profit
Depreciation	Straight-line, component lives 5–20 years
Exit assumption	5.5x EV/EBITDA on Year-5 EBITDA (base case)
Cost of equity	18% (discount rate for equity NPV)

NoteWhy our net profit differs from the sponsor’s

The sponsor’s brief states net profit before specifying a capital structure or depreciation schedule. Once we impose full depreciation on the R3.8bn asset base, full cash interest on the senior debt, and a proper tax charge, our re-derived net profit is lower than the sponsor’s in Years 1–3 and higher in Years 4–5. We present both, transparently, rather than forcing a reconciliation.

Sources & uses of funds

Use of funds	ZAR m	Source of funds	ZAR m
Manufacturing Expansion	1,100	Senior debt (DFI + commercial)	2,280
Logistics Fleet & Warehousing	720	Equity (sponsor + DFI/PIC/AfDB)	1,520
Polymer Production Facilities	650
Acquisitions Fund	550
Working Capital	340
Technology Systems	220
Export Infrastructure	120
Renewable Energy Systems	100
Total funding required	3,800	Total funding raised	3,800

Figure 13. *Funding structure at financial close*

Development-finance alignment

The proposed funders are not a generic list but a deliberately assembled consortium whose mandates map onto specific elements of the plan. This alignment is what makes a R2.28 billion senior-debt raise realistic at a blended 11.5%, development finance can price closer to the sovereign than pure commercial debt where the development case is strong.

Funder	Mandate fit with the plan
Industrial Development Corporation (IDC)	Industrialisation, manufacturing capacity, localisation, job creation, the core of divisions 1–4.
Development Bank of Southern Africa (DBSA)	Infrastructure, logistics corridors, warehousing and export nodes, division 5 and export infrastructure.
Public Investment Corporation (PIC)	Long-horizon institutional equity aligned to a JSE-listing exit pathway.
African Development Bank (AfDB)	Regional integration, SADC/East African expansion and cross-border trade under AfCFTA.
Export Credit Insurance Corporation (ECIC)	Export-infrastructure and cross-border receivables cover for regional sales.

StrengthThe financing case and the development case are the same case

Every rand of the R3.8bn programme advances an outcome a South African development-finance institution is mandated to fund, manufacturing capacity, logistics infrastructure, localisation, renewable energy, regional trade and employment. This is why the transaction is structured for blended, DFI-anchored funding rather than pure commercial debt, and why the 60/40 debt-to-equity mix is achievable at the modelled cost.