Ref.No.

: _________
Date: _____________
To: Corporate Banking Department Commercial Bank of Ethiopia
From: Seyoum Embaye Owner, Shewit Hotel, Adwa, Tigray.

Subject: Sending Comprehensive Cash Flow Forecasting for Loan Rescheduling

Application

Dear Sir/Madam,
This letter formally requests the rescheduling of the repayment obligations for our
existing loan facility with the Commercial Bank of Ethiopia, pertaining to Project
Term Loans, Working Capital Term Loans, and Amortized Interest on project term
loan.
The recent conflict in the Tigray region has inflicted substantial operational
disruptions and physical damage upon Shewit Hotel, situated in Adwa Town.
Consequently, our revenue streams have been severely curtailed, rendering us
unable to adhere to the previously agreed-upon repayment schedule.
Despite these significant headwinds, we are resolutely committed to a robust
recovery strategy, encompassing essential repairs and strategic renovations. To this
end, we have proactively secured supplementary funding through the divestiture of
personal assets, bridge financing from family members, and credit facilities from
other financial institutions. These decisive actions underscore our unwavering
dedication to the revitalization of our business and the fulfillment of our financial
commitments to the Commercial Bank of Ethiopia.
While the prevailing market conditions in Tigray present ongoing challenges, our
comprehensive recovery plan and anticipated rebound in the hospitality sector
within the next two years form the basis of our projections. We forecast a significant
100% increase in sales revenue by 2026, which will enable us to resume consistent
loan repayments and systematically address the outstanding debt as described
Forecasted Cash Flows in the coming two years here under:

SEYOUM EMBAYE
 PROJECTED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDING DECEMBER 31, 2025 AND 2026
Item 2025 2026
Birr Birr
Cash Flow From Operating Activities
Profit before tax
17,856,334.23 26,121,563.89
Adjustments for non-cash Items:
Add: Interest Expense
11,255,352.00 10,295,123.00
Add: Severance pay expense - -
Add: Custom's valuation difference - -
Add: Depreciation and amortization 9,250,975.00
9,250,975.00
Add: Fixed asset adjustment
Add: Accrued interest income 3,121,563.89
Changes in operating assets and liabilities:
Decrease (increase) in trade and other receivables (1,460,125.00
1,896,940.52 )
Decrease (increase) in inventories (1,856,985.00
6,516,147.20 )
Decrease (increase) in trade and other payables
(4,590,102.30) 5,609,781.90
Withholding tax paid (95,500.00
(94,770.05) )
Net cash from (used in) operating activities 50,986,397.6
42,090,876.60 8
Cash flows from investing activities
Investment in government bond - -
Addition of fixed assets - -
Additional investment

Net cash from (used in) investing activities - -

Cash flows from financing activities
Add/less: Increase( decrease) in owner's account
12,800,552.63 9,015,909.10
Add/less: Increase( decrease) in Related parties account -
Additional loan received - -
Less: Interest Paid (11,255,352.00
(10,255,352.00) )
Less: Lease payment (50,000.00
(90,000.00) )
Less: Loan Repayment (10,412,512.44
(7,868,111.81) )
Net cash from (used in) financing activities
(5,412,911.18) (12,701,955.34)
Net increase (decrease) in cash and cash equivalents
36,677,965.42 38,284,442.34
Cash and cash equivalents at beginning of year
412,509.72 17,829,391.37
Cash and cash equivalents at end of year 56,113,833.7
37,090,475.14 1

Note: The 2026 projections are based on anticipated growth and strategic
initiatives. Actual results may vary based on evolving market conditions and
operational execution.
Detailed Assumptions Underpinning the Cash Flow Projections:
Revenue Growth: A projected 90% increase in revenue in 2026, driven by the
anticipated recovery of the tourism sector post-conflict and the impact of facility
enhancements funded by the planned investments.
Cost of Goods Sold and Operating Expenses:While revenue is projected to
increase significantly, we anticipate managing operating expense growth through
strategic cost controls and economies of scale. Specific details on these projections
are available upon request.
Non-Cash Expenses:Depreciation is calculated based on the existing asset base
and planned capital expenditures. Interest expense reflects the current loan terms
and any new financing activities. A detailed breakdown of interest calculations can
be provided.
Investing Activities: The projected investments in 2025 and 2026 are crucial for
the hotel's rehabilitation and modernization, directly supporting the anticipated
revenue growth.
Financing Activities: The projected inflows from financing activities represent the
anticipated proceeds from the previously mentioned asset sales and additional
borrowings, strategically timed to support the recovery phase.
Proposed Loan Repayment Rescheduling Terms:
In light of the aforementioned circumstances and our detailed financial projections,
we respectfully request the Commercial Bank of Ethiopia to consider the following
proposed terms for rescheduling our existing loan:
Proposed Revised Repayment Schedule: We propose temporary moratorium on
principal and interest payments of the existing repayment schedule for two years.
Justification for Proposed Terms: The requested rescheduling terms are
carefully aligned with our projected cash flows, particularly the significant increase
anticipated in 2026. This revised schedule will enable Shewit Hotel to stabilize its
operations, complete essential renovations, and sustainably meet its financial
obligations to the Commercial Bank of Ethiopia without jeopardizing its long-term
viability.
We are confident that with the anticipated market recovery and the execution of
our strategic financial restructuring, Shewit Hotel will be in a strong position to fulfill
the revised loan repayment obligations. We are fully committed to maintaining
transparent communication with the Commercial Bank of Ethiopia and will provide
regular updates on our progress and financial performance.
We would greatly appreciate the opportunity to meet with you at your earliest
convenience to discuss this loan rescheduling request in detail, present the
supporting financial documentation, and address any questions you may have.
Thank you for your understanding, consideration, and continued partnership.

Sincerely,

Seyoum Embaye Owner, Shewit Hotel