- DXN (DXN) will launch a new non-renounceable entitlement issue to raise roughly $5.9 million, funding the company’s Hobart data centre
- This capital raise comes after a rollercoaster of previously failed attempts to raise funds
- This has been attributed to the current volatile market
- However, the data specialist is committed to completing its previously announced acquisition of the data centre in Hobart
- It’s important because now, more than ever, people are relying on data for entertainment or working arrangements
- At market close, company shares remain flat and trading for 1.4 cents each
DXN (DXN) will launch a new non-renounceable entitlement issue to raise roughly $5.9 million, funding the company’s Hobart data centre (DC).
The entitlement offer is on the basis of 13 new shares for 10 shares held by eligible shareholders at an issue price of $0.01 per share.
This capital raise comes after a rollercoaster of previously failed attempts to raise funds.
Earlier capital raise attempts
In early February, the modular data centre specialist announced its intention to purchase TasmaNet’s data centre in Hobart, Tasmania, for $2.7 million. To pay for this, DXN also announced an entitlement issue to raise $6 million.
Roughly five weeks after this, on March 19, DXN withdrew the $6 million raise “due to recent market volatility.”
“In light of the recent market volatility, it has become necessary to re-price the capital raising, due to events completely outside of the company’s control,” CEO Matthew Madden said at the time.
The new offer
Today, DXN stated subscribers to this offer will receive one free-attaching option for every one new share subscribed for and issued, exercisable at $0.02 per option on or before the date which is three years from the issue date.
The offer will result in approximately 592,179,622 new shares and 592,179,622 options being issued.
“We are focussed on completing the previously announced Hobart DC acquisition, which remains a compelling opportunity for the company,” Matthew said.
The data company is committed to this acquisition, especially during the current COVID-19 pandemic.
Sydney data centre
In the short-term, DXN is focused on filling its DXN-SYD01 data centre to the current 58 rack capacity. Once the Hobart DC acquisition and the capital raising is complete, the company will expand capacity from roughly 30 to as many as 100 racks.
“Throughout the COVID-19 crisis, we are seeing tailwinds for data centre operators due to the increased usage of data for entertainment (streaming, gaming) and commercial (video conferencing) purposes,” he added.
At market close, company shares remain flat and trading for 1.4 cents each.