Petroleum Logistics Start-up

Opportunity Snapshot

Investment Opportunity

Universal Downstream Ltd (UDL) is a startup logistics service company focused on supporting manufacturers and commodities trading companies with haulage assets to distribute and deliver finished products. UDL intends to acquire 25 petroleum tanker trucks and establish an operational support structure for the fleet.

This project which is estimated to cost US$5 million, represents the first phase of a fleet development plan that would introduce UDL into the robust market for logistics; which is a key peripheral in the fast moving consumer good (FMCG) sector’s value chain.

UDL is seeking to raise US$5 million through a combination of equity and debt to finance the acquisition of brand new tractors and fabrication of petroleum semi-trailers, as well as support assets.

Financial projections clearly indicate that the business will generate a positive return on investment. From our projections, UDL will generate a cumulative EBITDA of S$18.76 million and cumulative free cash flow of US$15.82 million over 5 years, which is sufficient to repay the debt principal and service the projected cumulative interest liability of US$1.02 million.

Net earnings in the 1st Year are projected at S$1.96 million using a conservative monthly trip cycle of 4 per truck for refined product and 3 per truck for bitumen. Using a bridging capacity of 45,000 litres and 40 metric tons for refined products and bitumen respectively, UDL’s operating and non-operating obligations would be conveniently met.

Competitive Advantage

Built a fleet support structure that minimizes risk and maximizes profit through operational efficiency back by technology, good management and funding.

Most haulage companies in Nigeria don't have yards and trucks part arbitrarily by the road side.

Our advantage will reflect in our cash flow

Yes, the advantage is sustainable

Rationale for the deal

Opportunity? - Large and growing consumer market, fleet renewal project by energy giants in Nigeria

Revenue? - Sell services

Use of financing

$5 million

Acquire assets

2 tranches within 3 months

Business plan is available for download. Potential investors can contact us on Merar.

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