North West Agri Feeds Business Plan — Funding Requirement and Structure

The funding requirement, the debt structure and the terms on which each tranche is drawn.

Section 20 of 26

Funding Requirement and Structure

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Use of funds

Table 12. Sources and uses of funds (R’000)

Uses	Amount	Sources	Amount
Capital expenditure	91,375	Equity	88,258
Initial working capital	10,963	Senior term debt	32,000
Ramp reserve	34,000	Asset finance	10,080
		Working-capital RCF	6,000
Total uses	136,338	Total sources	136,338

Funding structure and rationale

Figure 2. Funding structure: an equity-led package

The structure is a deliberate design choice, not a default. A thin-margin plant with a multi-year ramp cannot safely carry heavy senior gearing, early cash flows will not service it, as the DSCR trajectory shows. Equity therefore leads at 65% of the package. Senior term debt is capped at 23% and carries a two-year capital moratorium so that principal repayment begins only as the plant approaches profitability. Asset finance funds discrete, financeable mobile and packaging plant, and the revolving facility flexes with working capital.

Debt serviceability

Figure 3. Debt service cover ratio, Years 1–5

Table 13. Debt-service metrics (base case)

Metric	Y1	Y2	Y3	Y4	Y5
DSCR (x)	-0.42	-0.09	0.41	0.82	1.33
Interest cover (x)	n/m	0.1	1.1	2.4	4.5
Net debt / EBITDA (x)	n/m	66.3	5.3	2.7	1.2