TitanForge — Capital Requirements & Funding Structure
The facility terms modelled, the security package and intercreditor architecture, the funding-partner mandate fit, the DFI engagement process and the proposed covenant package and headroom underpinning TitanForge.
Section 19 · Business Plan
Capital Requirements & Funding Structure
The facility terms modelled, the security package and intercreditor architecture, the funding-partner mandate fit, the DFI engagement process and the proposed covenant package and headroom underpinning TitanForge.
The R92 billion requirement is funded 52% equity / 48% debt — a
conservative headline structure for a programme two-thirds of which is
infrastructure-class assets. Equity of R48bn comprises internal equity
(R15bn), strategic equity investors (R18bn) and infrastructure funds
(R15bn). Debt of R44bn comprises DFI facilities (R19bn, 15-year, 3-year
grace), green finance facilities (R5bn, 12-year, 2-year grace, attaching
to Helios) and commercial debt (R20bn, 10-year, 2-year grace).
Facilities are drawn pro-rata to programme deployment, and the plan
models full cash interest from first drawdown — no interest
capitalisation is assumed, which is conservative relative to typical
project-finance IDC treatment.
15.1 Facility terms modelled
| Facility | R bn | Rate | Tenor | Grace | Amortisation |
|---|---|---|---|---|---|
| DFI facilities (IFC/DBSA/AfDB/IDC) | 19 | 9.5% | 15 yrs | 3 yrs | Straight-line Y4–Y15 |
| Green finance (Helios SPV) | 5 | 8.5% | 12 yrs | 2 yrs | Straight-line Y3–Y12 |
| Commercial debt | 20 | 11.5% | 10 yrs | 2 yrs | Straight-line Y3–Y10 |
| Legacy facilities (existing) | 6 | 11.0% | 6 yrs | — | Straight-line Y1–Y6 |
| Working capital revolver | 2 limit | 12.0% | Evergreen | — | Cash-swept |
Debt draws follow capex pro-rata, peaking gross debt at R32.8bn in
Year 5 — just 1.66x that year’s EBITDA — before amortisation and cash
generation carry the Group to a net cash position by Year 8. The
revolver is modelled but never drawn in the base case; minimum cash
never falls below R3.7bn against a R1.5bn floor.
figure
The sponsor’s Year 10 balance sheet and valuation both carry R55bn of
debt, yet the funding structure raises only R44bn of new debt (R50bn
including legacy). On the amortising terms above, Year 10 gross debt is
R9.2bn and the Group holds net cash of R27.7bn. The R55bn figure is only
reachable if the Group refinances rather than amortises and re-levers
for further expansion — plausible strategically, but it is not what the
stated funding structure produces. This plan presents the amortising
schedule as the base case and treats the sponsor’s figure as an
unmodelled re-leveraging scenario.
15.5 Security package and intercreditor architecture
- Security: mortgage bonds over mining rights and
immovable property; special and general notarial bonds over plant,
rolling stock and inventories; cession in securitatem debiti of offtake
agreements, PPAs, insurance proceeds and bank accounts; pledge of SPV
shares at each ring-fenced entity. - Intercreditor: common terms agreement across
DFI, green and commercial tranches; pari passu sharing within the senior
class; DFI preferred-creditor status respected; green facilities secured
at Helios SPV assets with recourse limited to EnergyCo. - Accounts structure: waterfall through proceeds,
operating, capex, DSRA and distribution accounts; distributions only
through the lock-up test in Section 15.3. - Completion support: sponsor completion
undertakings per project until physical completion and a 1.20x trailing
DSCR test are met — replacing a blanket parent guarantee that would
defeat the ring-fencing. - Hedging policy: minimum 50% of floating-rate
exposure swapped for the first five years; no speculative commodity
hedging; FX left naturally hedged (USD-linked revenue vs ZAR cost
base).
15.4 Funding partner mandate fit
| Institution | Relevant mandate & instruments | Natural home in the structure |
|---|---|---|
| IFC (World Bank Group) | Private-sector mining, logistics and energy; A/B loans mobilising commercial co-lenders; Performance Standards anchor | Lead arranger of the DFI tranche; E&S standard-setter; B-loan umbrella for commercial banks |
| DBSA | SADC infrastructure; project preparation; ZAR lending capacity | Atlas Rail and Ocean Gate corridor finance in local currency |
| AfDB | Africa industrialisation (‘Industrialise Africa’ High-5); critical minerals value chains | Vulcan and Forge Park beneficiation facilities; Horizon regional deals |
| IDC | SA industrial capacity; mining and beneficiation equity and quasi-equity | Strategic equity tranche co-investor; standby facilities |
| Afreximbank | Intra-African trade infrastructure; export credit | Ocean Gate export infrastructure; trade finance lines for alloy exports |
| Climate windows (JET-IP, green facilities) | Renewable generation, storage, decarbonisation of hard-to-abate industry | R5bn green tranche at Helios SPV; potential concessional sweetener at Vulcan for furnace efficiency |
15.2 DFI engagement process and timeline
DFI capital moves on institutional clocks, and the funding plan
respects them. The targeted syndicate: IFC, DBSA, AfDB, IDC as anchor
lenders with green facilities from climate-window instruments, typically
requires 9–15 months from first engagement to disbursement. The plan
sequences this as: months 1–3 concept clearance and early review against
IFC Performance Standards; months 3–6 due diligence (technical via
independent engineer, E&S via ESIA disclosure, integrity and tax
structuring); months 6–9 appraisal and board approvals; months 9–12
common terms agreement negotiation, intercreditor arrangements and
conditions precedent; disbursement thereafter against certified
programme spend. Commercial lenders join at the common-terms stage,
taking comfort from DFI preferred-creditor presence and completed
E&S work.
15.3 Proposed covenant package and headroom
| Covenant | Level | Tightest year | Headroom at tightest point |
|---|---|---|---|
| DSCR (with Section 19.1 mitigants) | ≥ 1.20x lock-up / ≥ 1.05x default | Y4 | Downside 1.05x — at default floor; base 1.4x+ |
| Net debt / EBITDA | ≤ 3.25x | Y3 (2.30x) | 0.95x of EBITDA (~R9bn debt headroom) |
| Gearing (debt / total capital) | ≤ 45% | Y3 (34%) | 11 percentage points |
| Minimum liquidity | ≥ R1.5bn + DSRA | Y1 (R3.7bn + DSRA) | R2.2bn above floor |
| Distribution lock-up | No dividends unless DSCR ≥ 1.30x trailing and ND/EBITDA ≤ 2.0x | First tested Y4 | Policy already compliant by design |
The covenant package is deliberately set where the downside case
passes with the Section 19.1 mitigants in place and fails without them —
aligning lender protection with the structuring actions this plan
already recommends, rather than imposing headroom the early years cannot
support.
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 TitanForge Resources & Infrastructure Holdings.