Nala AgriServices — Investment Returns & Valuation

The headline returns, the lender coverage and credit metrics, the valuation and the sensitivity and scenario analysis underpinning Nala AgriServices.

Section 10 · Business Plan

Investment Returns & Valuation

The headline returns, the lender coverage and credit metrics, the valuation and the sensitivity and scenario analysis underpinning Nala AgriServices.

This section presents the returns available to the providers of
capital, the coverage ratios that protect lenders, and — in keeping with
the plan’s honest posture — the sensitivity of those returns to the
assumptions on which they depend.

10.1 Headline returns

Project IRR (unlevered)

46%

Equity IRR (levered)

54%

Equity money multiple

8.8×

Exit enterprise value

R280m

On the base case, the project generates an unlevered IRR of
45.7% (NPV of R113m at a 15% discount rate), and equity
earns a levered IRR of 53.9% (NPV of R89m at a 20% cost
of equity), for a money multiple of 8.8×. The exit assumes a strategic
sale at 5.5× FY2031 EBITDA, implying an enterprise value of R280m and
equity value of R289m (the Company holds net cash at exit).

Figure 18

Figure 18 Cumulative project and equity cash flows, including the FY2031 exit.

Read these returns with appropriate caution

The elevated headline IRRs are a direct consequence of rapid EBITDA
scaling on a modest equity base — the classic profile of a successful
early-stage rollout. A material share of equity value is realised at
exit and is therefore sensitive to both the achieved growth trajectory
and the exit multiple. The unlevered project IRR (46%), which strips out
the leverage effect, is the more conservative reference point, and the
downside case below shows returns holding up under a meaningful
stress.

10.2 Lender coverage and credit metrics

Debt-service coverage is transparently below 1.0× in the two ramp
years — 0.63× in FY2027 and 0.90× in FY2028 — before recovering to 1.54×
in FY2029 and 3.00× by FY2031. The ramp-year shortfall is structurally
mitigated, not concealed:

Figure 19

Figure 19 Debt-service coverage: sub-1.0× in ramp years, recovering to comfortable cover.

Mitigants for sub-1.0× ramp-year coverage

12-month capital grace on each senior tranche defers
principal until cash generation builds. Debt-service reserve of R3m (≈ 6 months’ senior
service) is funded at close and held throughout. Revolver headroom of R15m provides contingent
liquidity against the seasonal swing. Sponsor standby undertaking backstops the ramp
period until DSCR clears 1.0×.

R’000	FY2027	FY2028	FY2029	FY2030	FY2031
CFADS	1,790	7,370	18,450	28,428	37,416
Debt service	2,860	8,170	11,958	13,672	12,476
DSCR (×)	0.63×	0.90×	1.54×	2.08×	3.00×
Interest cover (×)	-1.90×	0.45×	2.32×	5.30×	11.91×
Net debt / EBITDA (×)	15.3×	2.9×	1.4×	0.5×	-0.2×
Gearing (%)	48%	58%	53%	35%	18%

Figure 20

Figure 20 Rapid deleveraging as EBITDA scales — net cash by FY2031.

10.3 Sensitivity analysis

FY2031 EBITDA is most sensitive to price and volume, and less so to
direct-cost movements given the pass-through nature of much of the cost
base. The one-way sensitivities below frame the range around the base
case.

Figure 21

Figure 21 One-way sensitivity of FY2031 EBITDA to price, volume and direct-cost shocks.

10.4 Downside case

The downside case — the scenario a senior lender or DFI would
underwrite to — stresses volume down 12%, price down 3% and direct costs
up 4%, and applies a lower 4.5× exit multiple. Even under this combined
stress the venture remains viable and returns remain attractive, though
the ramp-year coverage strain deepens, underscoring the importance of
the DSRA and sponsor standby.

Figure 22

Figure 22 Base versus downside — returns remain attractive under a combined stress.

Metric	Base case	Downside case
FY2031 revenue	R212m	R183m
FY2031 EBITDA	R51m	R36m
Exit multiple (EV/EBITDA)	5.5×	4.5×
Project IRR	46%	27%
Equity IRR	54%	32%

10.5 Exit strategy

The most probable exit is a trade sale to a larger agri-services
group, agri-input distributor, or agricultural-equipment OEM/dealer
network seeking a ready-made, data-rich, empowered services platform in
the grain belt — for which Nala’s multi-season field record is a
particularly valuable asset. Secondary pathways include a sale to a
private-equity or DFI-backed agribusiness consolidator, or, at greater
scale, a listing on the JSE AltX. The plan assumes an exit window from
FY2031 at a conservative 5.5× EV/EBITDA, below the mid-point of the
sector’s typical 5–8× range.

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 Nala AgriServices (Pty) Ltd.