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Funding:
The companys total funding requirements from the outset are 10,500,000. It is
suggested that the company raises 2,000,000 of this amount equity financing,
and the remainder through a mixture of long term and short term liabilities.
While the company intends to raise a proportion of the share capital amount
from the founders, the company would look to raise any remaining equity
financing requirements through an equity sale in a Series A funding round to
external investors. It is suggested that the funding round be primarily aimed at
venture capitalist firms who specialise in technology and services. This equity
capital cannot be raised in the form of convertible bonds, as the company needs
additional debt capital, and the leverage ratio resulting from convertible bonds
would be unsustainably onerous on the company.
The equity stake raised would be used wholly as capital expenditure (CAPEX),
along with a proportion of the long term liabilities the company incurs, so as to
maintain a leverage ratio with a low cost of capital. Working capital requirements
would be met entirely by short term liabilities which the company would seek to
satisfy at the earliest opportunity.
Capital expenditure:
Item
Unit cost
Cameras
Pole mounts &
installation
1,000
Total units
2,000
Total cost
2,000,000
2,000
500
1,000,000
200,000 metres
Cabling
50
5,000,000
1
Software
Total
1,000,000
-
1,000,000
9,000,000
Unit cost
500
10% of
monitoring
12.5% of
monitoring
1
Total units
2,000
Total cost
1,000,000
Working expenditure:
Item
monitoring
administrative
maintenance
Software licence
Misc.
Total
100,000
250,000
125,000
250,000
25,000
1,500,000
All figures assume an initial pilot project of Westminster Borough, with cameras
covering an average of 5 parking bays each. This would result in the equivalent
coverage that ParkRight currently has cross the Westminster Borough, and
therefore provides a comparison between the 2 companies.
4,000,000
current liabilities
4,475,000
total
8,500,000
Equity
Share capital
total
2,000,000
2,000,000
Year 1
Year 2
Year 3
Year 4
Year 5
2,000,000
400,000
400,000
400,000
400,000
1,000,000
50,000
50,000
50,000
50,000
cabling
5,000,000
250,000
250,000
250,000
250,000
Software
1,000,000
1,000,000
1,000,00
0
1,000,00
0
1,000,00
0
1,000,00
0
100,000
100,000
100,000
100,000
100,000
125,000
125,000
125,000
125,000
125,000
250,000
250,000
250,000
250,000
250,000
523,750
332,500
141,250
10,475,0
00
2,175,0
00
2,175,0
00
2,175,0
00
2,175,0
00
2,000,00
0
2,000,00
0
2,000,00
0
2,000,00
0
Outgoings
Capex
camera
installation
pole
mounts
Maintenance
monitoring
manageme
nt
maintenanc
e
Software
licence
Operational
financing
total
Revenu
e
TfL
Council
4,000,00
0
4,000,00
0
4,000,00
0
4,000,00
0
total
6,000,00
0
6,000,00
0
6,000,00
0
6,000,00
0
(10,475,0
00)
(10,475,0
00)
3,825,00
0
(6,650,0
00)
3,825,00
0
(2,825,0
00)
3,825,00
0
3,825,00
0
1,000,00
0
4,825,00
0
P/L
Cumulative