### **Expanded Funding Request for Boaz Trading PLC**
**Total Funding Request**: 27,500,000 ETB
**Capital Structure**: 60% Equity (16,500,000 ETB) + 40% Debt (11,000,000 ETB)
**Rationale for Mix**:
- **Equity**: Attracts investors aligned with long-term growth and brand-building, minimizing immediate repayment pressure.
- **Debt**: Secured via Ethiopia’s Development Bank at 12% annual interest (5-year term), leveraging low-risk collateral (factory assets).
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#### **Detailed Use of Funds**
1. **Cannes Activation**: 6,875,000 ETB (25%)
- **Breakdown**:
- **Event Participation**: 3,000,000 ETB (booth rental, red carpet access, filmmaker partnerships).
- **Marketing Collateral**: 1,500,000 ETB (VR experiences, limited-edition packaging, documentary production).
- **Logistics**: 1,375,000 ETB (shipping, travel for artisans/designers, insurance).
- **Contingency**: 1,000,000 ETB (unforeseen festival costs).
- **Strategic Impact**: Builds global brand equity, enabling premium pricing (65% margins) and attracting diaspora/international buyers.
2. **Local Production**: 11,000,000 ETB (40%)
- **Breakdown**:
- **Raw Materials**: 5,500,000 ETB (organic cotton from Arsi/Tigray farms, dyes, silk blends).
- **Labor & Facilities**: 3,300,000 ETB (Hawassa Industrial Park factory leases, artisan wages).
- **Equipment**: 1,650,000 ETB (solar-powered sewing machines, digital printing tech).
- **Quality Control**: 550,000 ETB (testing labs, certifications).
- **Strategic Impact**: Scales production to 50,000 units/month, reducing COGS by 20% through localized sourcing.
3. **Store Setup (Addis)**: 5,500,000 ETB (20%)
- **Breakdown**:
- **Flagship Store (Bole District)**: 3,000,000 ETB (rent, interior design, AR fitting rooms).
- **Kiosks**: 1,500,000 ETB (3 pop-ups at Addis Mercato, Unity Park, and Addis Fashion Week).
- **Tech Integration**: 1,000,000 ETB (POS systems, inventory management software).
- **Strategic Impact**: Enhances brand visibility; flagship store projected to drive 30% of local sales.
4. **Marketing**: 3,000,000 ETB (11%)
- **Breakdown**:
- **Digital**: 1,200,000 ETB (TikTok/Instagram ads, influencer campaigns @ 10,000 ETB/post).
- **Events**: 900,000 ETB (Meskel Festival activations, student design competitions).
- **Traditional**: 600,000 ETB (billboards, radio spots on Sheger FM).
- **PR**: 300,000 ETB (press releases, media partnerships).
- **Strategic Impact**: Targets 500,000+ impressions/month, converting 5% to sales (1,500 units).
5. **Contingency Fund**: 1,125,000 ETB (4%)
- **Purpose**: Mitigates risks like ETB depreciation (-15% in 2023), supply delays, or political disruptions.
- **Recommendation**: Increase to 10% (2,750,000 ETB) by reallocating 1,625,000 ETB from phased Cannes spending.
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#### **Repayment & Investor Returns**
- **Debt Servicing**: 2,750,000 ETB/year (principal + 12% interest), funded via 412,500 ETB monthly cash flow.
- **Equity Returns**: Projected 18% ROI by Year 3 via dividends or acquisition (e.g., Sheba Leather).
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#### **Alignment with Business Goals**
- **Cannes Activation**: Positions Boaz as a global luxury brand, justifying premium pricing.
- **Local Production**: Ensures affordability for Ethiopian consumers (300–800 ETB range).
- **Store Setup**: Drives omnichannel sales (30% in-store, 70% online).
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### **Risk Mitigation & Adjustments**
- **Phased Cannes Spending**: Allocate 50% of activation budget in Year 1, 30% in Year 2, 20% in Year 3 to align with realistic cash flow.
- **Contingency Boost**: Redirect 1,625,000 ETB from Cannes to contingency, raising it to 10% (2,750,000 ETB) for resilience.
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### **Conclusion**
This funding structure balances growth ambition with fiscal prudence. By prioritizing local production efficiency and phased global branding, Boaz Trading PLC ensures sustainable scaling while safeguarding against Ethiopia’s volatile economic landscape. Investors gain exposure to Ethiopia’s booming textile sector and a culturally resonant brand poised for regional and international success.