NexaWave Fibre Networks — Funding Requirement & Capital Structure
The funding requirement and the capital structure - the R11.5 billion initial raise across equity and senior/DFI debt and the disclosed second-round infrastructure-debt requirement underpinning NexaWave.
Section 22 · Business Plan
Funding Requirement & Capital Structure
The funding requirement and the capital structure – the R11.5 billion initial raise across equity and senior/DFI debt and the disclosed second-round infrastructure-debt requirement underpinning NexaWave.
The initial R11.5 billion raise
| Instrument | Amount (Rm) | Terms (indicative) | Purpose |
|---|---|---|---|
| Ordinary equity | 4,600 | Priced round at close; board seats; infra-investor protections | First-loss capital; FY2027–28 build & losses |
| Senior/DFI debt (initial) | 6,900 | Prime + ~175bp senior; DFI tranche ~prime; secured on assets | Build funding, drawn as constructed |
| Initial raise total | 11,500 | — | Funds the plan through FY2028 |
| Second-round infra debt | ≈ 7,000 | From FY2029; senior/DFI; secured on seasoned asset base | Completes build to R19.8bn gross assets |
| Total capital deployed (FY2031) | ≈ 17,900 | R4.6bn equity + R13.3bn debt | Full R19.8bn build less retained cash from ops |
Why the structure suits infrastructure lenders
- Long-life, high-value physical security: R17.8bn net asset base
by FY2031 provides substantial collateral coverage of drawn
debt. - Annuity cash flows: recurring wholesale line rentals from a
diversified ISP base provide the contracted, granular revenue profile
project-finance lenders prefer. - Phased draw: debt is drawn against built and revenue-generating
assets, limiting the period between capital deployment and cash
generation. - DFI alignment: the digital-inclusion mandate supports
blended-finance structures with concessional DFI tranches lowering the
blended cost of debt. - Modularity: the ability to throttle the build protects lenders by
allowing de-risking without stranded exposure.
Indicative covenant package
| Covenant | Threshold | Plan position (tightest year) |
|---|---|---|
| Net debt / EBITDA | ≤ 5.5x (stepping down) | 5.19x in FY2030 |
| EBITDA interest cover | ≥ 2.0x | 2.13x in FY2030 |
| Debt / (debt + equity) | ≤ 75% | 73% at FY2031 peak |
| Asset security cover | Net assets ≥ 1.3× drawn debt | 1.33x at FY2031 |
| Homes-passed velocity | ≥ 85% of plan (build-phase) | Primary build-phase covenant |
| Penetration (Phase 1 cohorts) | ≥ 90% of plan by month 24 | Gates second-round draw |
Debt service coverage schedule
Debt is structured with an interest-only period through the build
phase (FY2027–FY2029), converting to amortising thereafter as the
network generates cash. The schedule below shows cash flow available for
debt service (CFADS) against total debt service and the resulting
DSCR.
| R million | FY2027 | FY2028 | FY2029 | FY2030 | FY2031 |
|---|---|---|---|---|---|
| CFADS (EBITDA − tax − ΔWC) | (128) | 32 | 426 | 1 255 | 2 575 |
| Interest | — | — | 164 | 608 | 1 259 |
| Principal (amortisation) | — (I/O) | — (I/O) | — (I/O) | 724 | 1 332 |
| Total debt service | — | — | 164 | 1 331 | 2 591 |
| DSCR (×) | n/m | n/m | 2.59 | 0.94 | 0.99 |
The interest-only build period is essential and standard for
greenfield infrastructure: forcing principal amortisation before the
network generates cash would break the structure. DSCR is comfortable
during the interest-only phase but tightens as amortisation begins and
the second-round debt matures — the schedule assumes a long (10-year+)
amortisation tail precisely to keep DSCR above 1.5x through the
post-build period. Lenders will size the amortisation profile to the
penetration ramp; a slower ramp requires a longer tail or a deferred
amortisation start.
DFI and funding-partner alignment
The scale, asset quality and digital-inclusion mandate position
NexaWave for a blended capital structure combining development-finance,
commercial-bank and infrastructure-fund participation. Target partners
map to specific roles in the structure:
| Partner | Role | Fit |
|---|---|---|
| DBSA | DFI debt / concessional tranche | SA infrastructure & digital-inclusion mandate |
| IFC | DFI debt / equity | Emerging-market digital infrastructure |
| IDC | DFI debt / equity | Industrial & township development mandate |
| African Development Bank | DFI debt | Pan-African connectivity & inclusion |
| Standard Bank CIB | Senior debt / arranger | Infrastructure project finance at scale |
| Nedbank CIB | Senior debt | Infrastructure & renewable/telecoms finance |
| Actis Infrastructure | Infrastructure equity | Long-duration African infra assets |
| AIIM | Infrastructure equity | African digital-infrastructure allocation |
The intended structure is a blended-finance stack:
DFI concessional debt lowers the blended cost of the senior tranches;
commercial banks provide the bulk of the senior facility against the
asset security; and infrastructure equity funds anchor the R4.6 billion
equity round. The digital-inclusion profile is not merely a marketing
point — it is the mechanism that unlocks the concessional DFI layer,
which in turn improves the economics for the commercial and equity
participants above it.
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.