NexaWave Fibre Networks — Financial Plan — Basis of Preparation & Key Assumptions
The financial plan basis of preparation and the key assumptions - the modelling framework and the assumptions register underpinning NexaWave.
Section 18 · Business Plan
Financial Plan — Basis of Preparation & Key Assumptions
The financial plan basis of preparation and the key assumptions – the modelling framework and the assumptions register underpinning NexaWave.
The five-year projections adopt a two-layer discipline. Layer
one preserves the sponsor’s headline revenue, EBITDA, homes passed,
subscribers and gross asset value exactly. Layer two —
everything beneath EBITDA and the entire balance sheet, cash flow and
funding structure — is independently re-derived: full straight-line
depreciation on the fibre asset base, full cash interest on drawn debt
at market-consistent rates, and 27% SA corporate tax with assessed-loss
carry-forward. The balance sheet is asserted to tie to zero in every
projection year, and where the sponsor’s asset-value target exceeds the
stated raise, the resulting funding gap is disclosed rather than
concealed.
| Assumption | Value | Basis / comment |
|---|---|---|
| Currency & horizon | ZAR (R million), FY2027–FY2031 | March financial year-ends assumed |
| Corporate tax | 27%, assessed-loss carry-forward | Current SA corporate rate |
| Capex | Derived from gross asset roll-forward: R1.1/2.4/3.7/5.2/7.4bn | Equals annual change in sponsor gross asset value |
| Cost per home passed | ~R13,750 → ~R6,200 | Efficiency curve from density, aerial mix, learning |
| Depreciation — passive | Straight-line, 20 years | Long-life fibre/ducts/poles (~90% of capex) |
| Depreciation — active/tech | Straight-line, 7 years | OLTs/ONTs/electronics (~10% of capex) |
| Penetration | 22.5% → 51.8% | Connected / passed; above Vumatel’s current ≈42% |
| Blended ARPU | R1,389 → R513 / month | Declines with Reach/township mix shift |
| Senior/DFI debt pricing | ≈12.25% (prime + 175bp); DFI tranche ~prime | Infrastructure debt, drawn as built |
| Second-round debt | ≈R7.0bn from FY2029 | Beyond the R11.5bn initial raise — see Section 21 |
| Minimum operating cash | R250m | Treasury floor |
| Equity raise | R4,600m, drawn at close | Portion of R11.5bn initial raise |
The sponsor’s plan pairs a R19.8 billion gross-asset build with a
R11.5 billion stated raise. These are not consistent: our modelling
shows the build requires ≈R17.9 billion of total capital (R4.6bn equity
+ R13.3bn debt) by FY2031. The R11.5 billion is therefore an initial
raise — sufficient through FY2028 — and a second-round infrastructure
debt facility of ≈R7.0 billion is required from FY2029. This is the
single most important structural fact in the plan and is treated as a
gating milestone (Section 21, roadmap M26), not an
afterthought.
Key-assumption sensitivity ranking
Not all assumptions carry equal weight. The register below ranks each
key driver by its impact on equity value, directing due-diligence
attention to what actually matters.
| Assumption | Plan value | Impact on value | Why |
|---|---|---|---|
| Penetration ramp | → 51.8% | Very high | Drives revenue across a fixed-cost asset; the dominant lever |
| Second-round funding | ≈R7.0bn, FY2029 | Very high | Binary: without it, the build cannot complete |
| Cost per home passed | → R6,200 | High | Determines total capex and therefore total debt |
| Homes-passed velocity | 2.8m by FY2031 | High | Build pace gates revenue; wayleave-dependent |
| Exit multiple | 11.0x | High | Directly scales terminal equity value |
| Blended ARPU | → R513 | Medium | Partly offset by volume; mix-driven |
| Interest rate on debt | ≈12.25% | Medium | Large debt base, but DFI tranches mitigate |
| Opex ratio | → 57% of revenue | Medium | Operating leverage improves it with scale |
| Tax rate | 27% | Low | Sheltered by assessed losses until FY2031 |
The register directs diligence to the top of the list. The two “very
high” items — penetration and second-round funding — are where a funder
should concentrate scrutiny, because a failure in either invalidates the
plan regardless of how every other assumption performs. Conversely, the
tax and opex assumptions can move materially without threatening the
structure. A useful test for any reader is: if only one
assumption could be independently verified before committing capital, it
should be the credibility of the penetration ramp on the specific
footprint NexaWave intends to build.
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 NexaWave Fibre Networks (Pty) Ltd.