1. Tugbug Proposal
For financing of 13 cr for opening of TB Learning Centers in Fabindia ECs

2. Financing
FABINDIA will give TB two convertible tranches of financing of Rs 6 cr and for each Tranche TB promoters to put in 50 lakh equity financing as the co-investment amount. To cover 8 crores of Capex for setting up 20 TB outlets and finance the 5 cr operating loss.

3. Terms
Each Tranche will be and Optionally Fully Convertible Debenture carrying an interest rate of 9% which will can convert to equity after 3 years from the date of issuance at an agreed upon valuation formula. Tranche 1 paid April 2019 due April 2022 Tranche 2 Paid Jan 2020 due Jan 2023

4. Valuation Formula
At the time of conversion the following formula will be applied for conversion of the amount + accumulated interest due: {(Sales x 3 )+ (EBIDTA x 15)} / 2 = Value of TB

5. ASSUMPTIONS
Assuming there will be 30 TB’s in 2022 and each will be doing 60 lakhs per annum with an EBIDTA of 10%
Then the Company Valuation will be:
{(60x30x3) + (6x30x15)/2} = /2
= 81/2 = 40.5 (pre-money valuation)
After conversion of both tranches (and with interest) the Post Money Valuation will be
= = of which FOPL will hold 27%