RedHarvest Tomato Farms — Funding Requirement & Capital Structure
RedHarvest Tomato Farms requires total funding of R35 million to establish the 120-hectare commercial tomato farming operation over three development phases. The proposed funding structure balances the interests of equity investors and debt providers while maintaining a sustainable capital structure.
Section 17 · Business Plan
Funding Requirement & Capital Structure
RedHarvest Tomato Farms requires total funding of R35 million to establish the 120-hectare commercial tomato farming operation over three development phases. The proposed funding structure balances the interests of equity investors and debt providers while maintaining a sustainable capital structure.
Funding land, irrigation infrastructure, greenhouses, equipment and working capital through to maturity.
RedHarvest Tomato Farms requires total funding of R35 million to establish the 120-hectare commercial tomato farming operation over three development phases. The proposed funding structure balances the interests of equity investors and debt providers while maintaining a sustainable capital structure.
17.1 Funding Sources
| Source | Amount | % of Total | Key Terms |
|---|---|---|---|
| Equity — Shareholders | R14,000,000 | 40% | Proportional to shareholding |
| Debt — Agricultural DFI | R14,000,000 | 40% | 7-year term, Prime +1.5%, 12-month moratorium |
| Debt — Commercial Bank | R7,000,000 | 20% | 5-year term, Prime +2%, secured by equipment |
| Total | R35,000,000 | 100% |
17.2 Use of Funds
Capital will be deployed in strict alignment with the phased development schedule. Phase 1 (R18.5m) establishes core infrastructure and the first 50 hectares of production. Phase 2 (R10.5m) extends production to 90 hectares. Phase 3 (R6.0m) completes the build-out to 120 hectares. Detailed capital allocation is provided in Section 10.3. A dedicated project management function will oversee capital deployment, procurement, and construction milestones, with monthly reporting to the Board and quarterly reporting to investors.
17.3 Debt Service Schedule
| Debt Metric (R'000) | Year 1 | Year 2 | Year 3 | Year 4 |
|---|---|---|---|---|
| Opening Debt Balance | 0 | 14,000 | 18,000 | 12,500 |
| New Drawdowns | 7,000 | 7,000 | — | — |
| Scheduled Repayments | (1,000) | (3,000) | (2,500) | (7,000) |
| Closing Debt Balance | 14,000 | 14,000 | 9,500 | 0 |
| Interest Expense | (1,890) | (1,575) | (1,260) | (945) |
| Total Debt Service | (2,890) | (4,575) | (3,760) | (7,945) |
| DSCR (EBITDA / Debt Service) | 3.1x | 3.6x | 5.7x | 3.1x |
The Debt Service Coverage Ratio (DSCR) remains comfortably above the minimum covenant level of 1.5x throughout the projection period, indicating strong capacity to service debt obligations from operating cash flows.
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