Issuer

Tierra Farm Assets Company Private Limited (Tierra)

Instrument

Unlisted Unrated Secured Redeemable Non-Convertible Debentures ("NCDs")

Mode of issue

Private Placement

Issuance mode of Instrument

Demat form through authorized depository participant

Depository

NSDL

NCD Issue Size

Rs. 50 Crores

Coupon Payment Date

To be paid quarterly with a 6 month's moratorium in the beginning

Coupon Rate

18.25% per Annum (19.45% IRR)

Tenor

48 months

Principal Repayment

Principal Repayment on a quarterly basis in equal value after 24 months i.e. 24^th, 27^th, 30^th, 33^rd, 36^th, 39^th, 42^nd, 45^th and 48^th month.

Security

·             Total cover of 2.5X of principal value in the form of real assets

·             Complete cash flow of Avani Megha Project (estimated to be over Rs. 200 Cr in 4 years)

·             99% shares of Tierra FACPL

·             Equity/General Partner interest of Tierra in Malnad plantations and Avani Projects – through the shares of                            subsidiary company which holds these interests

·             Acquired assets through the proceeds of the NCD e.g. food processing plant, land

·             Rights to cut and sell timber in specific plantations – amounting to 1X the principal amount

·             Personal guarantee of all the promoters of Tierra FACPL

·             Post Dated Cheques for all the outstanding principal and interest repayment

At the beginning, for the first Rs. 30 Cr raised for the issue, the 2.5X cover is envisaged to be the following

•    NA Land in Bengaluru city: 6 Acre Nelamangala Land worth around Rs. 36Crs – Rs. 40 Crs

•    Chandravalli Coffee Estate –  100 Acres of Plantation having its registered office at Bidare Village, Khandya            Hobli, Chickmangalur Taluk, Chickmangalur District worth around Rs. Rs. 15 Crs to Rs. 18 Crs.

•    Residential Property in Jayanagar, Bangalore with building worth about Rs. 15 to Rs. 18 Crs.

•    Cashflow escrow of Phase – II of Avani Mukta Project (9 acre land parcel)

•    99% shares of Tierra FACPL Equity/General Partner interest of Tierra in Malnad plantations and Avani Projects – through the shares of subsidiary company which holds these interests

At a subsequent date, when Avani Megha project receives NA status and requisite permissions to begin the sale of farmhouse plots, the land in Avani Megha project worth more than 2.5X the principal amount along with the project cash flows of the same will be provided as a collateral to the debenture issue.

After this, the collateral/mortgage on 6 Acre Nelamangala Land in Bengaluru, Chandravalli Coffee plantations (100 acres) and the residential property at Jayanagar, Bangalore will be released once the mortgage of Avani Megha 40 acre land is to the satisfaction of the debenture trustees.

Registration of mortgage of Avani Megha land will be done when it is taken as collateral.

However, should the collateral of Avani Megha land not be available within 6 months of the issue beginning date, all the initial collateral will be taken for registered mortgage.

Once the sales in Avani Megha project have started at a satisfactory level, the cash flow escrow of Phase II of Avani Mukta project (9 acre portion) will be released.

Debt Service Coverage

A Debt servicing cover comprising amount payable as interest and the principal in next three months shall be maintained in the escrow account, at all times till the complete redemption of the debentures.

Prepayment Option

Lock-in period of 12 months. The issuer can make pre-payment between 12 months and 24 months at 3% penalty and after 24 months without any pre-payment penalty

Utilization of Funds

Of the 75 Crores raised, the issuer intends to use Rs. 50 Crores for development of land parcels into farmhouses for Avani Megha project and, Rs. 16 Crores for acquisition of a poultry plant and Rs. 8-9 Cr. for fulfilling working capital needs of the company.

Investment Size

Minimum investment of Rs. 15 Lakh and additional investment in multiples of Rs. 1 Lakh.