TerraVanta AgriServices Business Plan — Financial Plan & Assumptions

The sponsor’s headline revenue and EBITDA are preserved exactly. Every line beneath EBITDA, depreciation, interest, tax and the full three statements, is independently re-derived, and the balance sheet is proven to balance in every year.

14.1 Modelling basis & key assumptions

Assumption		Basis
Reporting currency		US$ (group functional currency)
Illustrative USD/ZAR		R18.50 (modelling only)
Revenue & EBITDA		Sponsor headline, preserved exactly
Depreciation		Straight-line, phased build, half-year convention
Capital structure		US$200m equity / US$220m senior / US$80m mezzanine
Senior debt		11.0%, 10-yr tenor, 2-yr principal grace
Mezzanine debt		15.0%, interest-only over the plan horizon
Finance-book facility		80% advance, 12% secured wholesale cost
Working capital		55 days inventory, 35 days receivables, 45 days payables
Taxation		27% blended, 80% assessed-loss cap
	NOTE — How to read these statements Because revenue and EBITDA are fixed by the sponsor, operating expenses are derived as the residual that reconciles gross profit to EBITDA. The analytical value of the model therefore lies beneath the EBITDA line, in the depreciation, financing, tax and balance-sheet dynamics that determine whether the headline EBITDA actually converts into equity value.

14.2 Projected profit & loss

Net profit builds from a near-break-even Year 1 to US$70m by Year 5. A small net loss of US$6m before tax arises in Year 2 as depreciation and interest peak during construction, a normal feature of an infrastructure ramp, funded by the committed facilities.

US$ million	Year 1	Year 2	Year 3	Year 4	Year 5
Revenue	120	240	410	620	850
Cost of sales	82	161	271	406	553
Gross profit	38	79	139	214	298
Operating expenses	20	37	61	88	108
EBITDA	18	42	78	126	190
EBITDA margin	15.0%	17.5%	19.0%	20.3%	22.4%
Depreciation & amortisation	6	18	26	30	31
EBIT	12	24	52	96	159
Net finance cost	11	30	46	56	63
Profit before tax	1	(6)	6	41	95
Taxation (27% blended)	0	0	0	11	26
Net profit after tax	1	(6)	6	30	70
Net margin	0.5%	-2.6%	1.4%	4.9%	8.2%

Figure 13 *Year-5 profit bridge: from EBITDA to net profit after tax.*

Analyst flagThin early margins are structural

Net margins of 0.5%, (2.6)% and 1.4% in Years 1–3 reflect heavy depreciation and financing costs against a still-ramping top line, not weak operations. Margins expand to 8.2% by Year 5 as assets mature and leverage falls. Investors underwriting this plan are underwriting a build-and-ramp profile, not a steady-state business.

14.3 Projected balance sheet

Total assets grow to US$905m by Year 5, dominated by grain and processing infrastructure and the agricultural finance book. The balance sheet is proven to tie to zero in every year by construction and by explicit assertion in the model.

US$ million	Year 1	Year 2	Year 3	Year 4	Year 5
ASSETS
Property, plant & equipment (net)	163	301	365	350	341
Agricultural finance book	60	130	210	300	390
Inventory	12	24	41	61	83
Trade & other receivables	12	23	39	59	82
Cash & cash equivalents	50	54	19	10	10
Total assets	297	532	674	781	905
EQUITY & LIABILITIES
Share capital	110	170	200	200	200
Retained earnings	1	(6)	0	30	100
Total equity	111	164	200	230	300
Senior debt	88	176	193	165	138
Mezzanine debt	40	68	80	80	80
Finance-book wholesale facility	48	104	168	240	312
Revolving credit facility	0	0	0	16	8
Trade & other payables	10	20	33	50	68
Total equity & liabilities	297	532	674	781	905

Figure 14 *Balance-sheet composition: assets vs funding, Years 1–5.*

StrengthA balance sheet that balances — verifiably

The model asserts assets equal equity plus liabilities to within US$0.01m every year. This discipline, full three-statement integration with an enforced balancing check, is what separates a bankable model from a spreadsheet of disconnected assumptions.

14.4 Projected cash flow

Operating cash flow turns firmly positive from Year 1 and scales with EBITDA. Investing outflows peak in Years 1–2 with the infrastructure build and finance-book growth, funded by phased equity, senior, mezzanine and finance-facility drawdowns. A minimum operating cash floor of US$10m is maintained throughout via a committed revolving facility that peaks at only US$15.8m.

US$ million	Year 1	Year 2	Year 3	Year 4	Year 5
Net profit after tax	1	(6)	6	30	70
Add: depreciation & amortisation	6	18	26	30	31
Working-capital movement (net)	(14)	(14)	(19)	(24)	(26)
Cash flow from operations	(7)	(2)	12	36	75
Capital expenditure	(170)	(156)	(90)	(16)	(21)
Finance-book investment	(60)	(70)	(80)	(90)	(90)
Cash flow from investing	(230)	(226)	(170)	(106)	(111)
Equity drawdowns	110	60	30	0	0
Debt drawdowns (senior + mezz)	128	116	56	0	0
Finance-facility drawdowns	48	56	64	72	72
Debt principal repayments	0	0	(28)	(28)	(28)
Net RCF movement	0	0	0	16	(8)
Cash flow from financing	286	232	123	60	36
Net movement in cash	50	4	(35)	(9)	0
Opening cash	0	50	54	19	10
Closing cash	50	54	19	10	10

Figure 15 *Cash-flow bridge and closing cash, Years 1–5.*

14.5 Capital structure & sources and uses

The initial US$500 million raise funds the depreciable asset base, working capital and the finance-book first-loss. The agricultural finance book is funded separately through a secured wholesale facility that scales to US$312m.

Figure 16 *Sources and uses of the initial US$500m.*

Figure 18 *Finance book: wholesale facility (80%) and group first-loss (20%).*

Key findingThe full funding picture

Investors should size the transaction on total committed facilities of approximately US$628m, US$300m core debt, a US$312m finance-book facility and a ~US$16m revolving facility, alongside US$200m of equity. The US$500m headline is the equity-plus-core-debt raise; the finance facility is a separate, self-liquidating, receivables-secured line.

14.6 Debt service, coverage & leverage

Senior-and-mezzanine debt-service cover remains above 1.8x except in Year 3, when it compresses to 1.32x as senior amortisation begins. Core net debt de-levers steadily from 4.3x EBITDA to 1.1x by Year 5, a strong de-risking trajectory that should support refinancing and exit optionality.

Figure 19 *Debt-service cover and core net-debt / EBITDA, Years 1–5.*

Analyst flagStructure around the Year-3 trough

A 1.32x DSCR sits close to a typical 1.30x DFI covenant. We recommend a Year-2/3 covenant holiday or step-down, a cash-sweep on surplus, and a modestly longer senior grace period. With these structural features the plan is financeable; without them, Year 3 is a genuine covenant risk.

Illustrative covenant compliance schedule

The schedule below tests the projected metrics against an indicative covenant package typical of a senior facility from a development finance institution or commercial lender. Every year passes the proposed thresholds, but Year 3 debt-service cover and Year 1–2 leverage carry the thinnest headroom and should frame the covenant negotiation.

Covenant metric		Threshold	Y1	Y2	Y3	Y4	Y5
DSCR (senior + mezz)		≥ 1.30x	2.27x	1.86x	1.32x	1.95x	2.93x
Core net debt / EBITDA		≤ 5.00x	4.34x	4.52x	3.25x	1.99x	1.13x
EBITDA interest cover		≥ 1.30x	1.68x	1.39x	1.69x	2.27x	3.00x
Minimum cash balance		≥ US$10m	49.8	54.2	19.2	10.0	10.0
Headroom to tightest test		—	Ample	Thin	Thin	Ample	Ample
	NOTE — Reading the covenant headroom The metrics clear every proposed threshold, so the plan is covenant-compliant as modelled. The caution is one of headroom, not breach: a modest EBITDA shortfall in Years 2–3 would erode the slim margin on DSCR and interest cover. A covenant step-down across the construction window, paired with an equity-cure right, converts that sensitivity from a default risk into a managed contingency.

14.7 Key financial ratios & credit metrics

The ratio set below consolidates the profitability, return and leverage trajectory that a credit committee or investment committee will underwrite. The signature of the plan is clear: margins and returns are compressed during the build, then expand sharply as infrastructure matures and leverage unwinds, return on equity moves from near-zero to 23% and core leverage more than halves.

US$ million		Year 1	Year 2	Year 3	Year 4	Year 5
Profitability & returns
Gross margin		32.0%	33.0%	34.0%	34.5%	35.0%
EBITDA margin		15.0%	17.5%	19.0%	20.3%	22.4%
Net margin		0.5%	(2.6)%	1.4%	4.9%	8.2%
Return on equity (ROE)		0.5%	(3.8)%	2.8%	13.1%	23.2%
Return on capital employed		3.9%	4.5%	7.7%	12.3%	17.5%
Leverage & coverage
Net debt / EBITDA		7.01x	7.00x	5.40x	3.90x	2.78x
Core net debt / EBITDA		4.34x	4.52x	3.25x	1.99x	1.13x
Gearing (net debt / equity)		1.14x	1.79x	2.11x	2.13x	1.76x
EBITDA interest cover		1.68x	1.39x	1.69x	2.27x	3.00x
DSCR (senior + mezz)		2.27x	1.86x	1.32x	1.95x	2.93x
	KEY FINDING — The de-risking trajectory is the investment case Two numbers capture the thesis. Core net debt falls from 4.3x to 1.1x EBITDA, and return on equity climbs from nil to 23% over five years. An investor entering at construction is paid for the ramp risk; the balance sheet that emerges by Year 5 is materially investment-grade and refinanceable, which is what underpins the exit.

14.8 Working capital & cash conversion

Trading working capital is modelled on disciplined, sector-realistic terms: 55 days of inventory across grain, retail and feed, 35 days of trade receivables, and 45 days of payables. The resulting cash-conversion cycle of roughly 45 days is a genuine funding requirement that scales with revenue and is carried by the revolving facility, not by the finance book.

US$ million		Year 1	Year 2	Year 3	Year 4	Year 5
Inventory		12.3	24.2	40.8	61.2	83.3
Trade receivables		11.5	23.0	39.3	59.5	81.5
Trade payables		(10.1)	(19.8)	(33.4)	(50.1)	(68.1)
Net trading working capital		13.7	27.4	46.7	70.6	96.7
Inventory days		55	55	55	55	55
Receivable days		35	35	35	35	35
Payable days		45	45	45	45	45
Cash-conversion cycle (days)		45	45	45	45	45
	NOTE — Two distinct funding pools — kept separate by design Trading working capital (inventory, retail and feed receivables and payables) is funded by the revolving facility and internal cash. The agricultural finance book, loans advanced to farmer customers, is funded separately by the ring-fenced, receivables-secured wholesale facility. Keeping the two pools distinct prevents the finance book from consuming trading liquidity and lets each be sized, priced and covenanted on its own risk profile.