- Data centre operator, NEXTDC (NXT) will be raising $672 million to fund the construction of its third data centre in Sydney
- The money raised will be completed through a placement and share purchase plan
- The majority of the funds raised will cover the construction of the company’s third data centre in Sydney
- NEXTDC has seen a significant increase in demand due to many office workers now working from home
- This centre has a total capacity of 80 megawatts and is expected to be ready by the first half of the 2022 financial year
- The rest of the money will be used for development opportunities and transaction costs
- NEXTDC entered a trading halt today and shares last traded for $9.18 each
Data centre operator, NEXTDC (NXT) will be raising $672 million to fund the construction of its third data centre in Sydney.
The company will raise this money through a placement of new shares and a share purchase plan.
Shares in the placement will be issued at $7.80 each which represents a 9.4 per cent discount to the five-day volume-weighted average price (VWAP) and a 15 per cent discount to the last closing price.
Under the share purchase plan, eligible shareholders have the opportunity to subscribe for up to $30,000 worth of new shares.
While the price for the share purchase plan is not known as of yet, shares will be priced lower than $7.80.
NEXTDC’s Managing Director and CEO Craig Scroggie and all Non-Executive Directors will be subscribing for up to the full $30,000.
Of the $672 million, $350 million will be used for the data centre, $307 million will be used to grow development opportunities, and the remaining $15 million is for transaction costs.
Sydney Data Centre
NEXTDC’s third data centre, S3, will be built in Gore Hill which is located 10 kilometres from Sydney’s CBD, and seven and eight kilometres from S1 and S2 respectively.
The initial load for S3 is planned for 12 megawatts but it has the capacity to host 80 megawatts.
This facility is expected to be ready by the first half of the 2022 financial year.
“Based on the strong level of orders already received for S2 and our growing confidence in the forward sales pipeline, NEXTDC is confident that the projected demand in Sydney, together with our return expectations, warrants the next phase of investment in Sydney’s third generation of data centres,” Craig said.
Growth Initiatives
Due to COVID-19 and many office workers now working from home, NEXTDC has experienced a significant increase in demand.
Presently, the company is looking at a range of growth initiatives such as adding additional data capacity at its existing centres, and purchasing more sites so more centres can be built.
“NEXTDC continues to see significant demand for its data centre services during a turbulent market environment due to COVID-19,” Craig commented.
“We have decided to prudently equity fund near-term growth opportunities in this period of market volatility to continue to support customer demand,” he added.
NEXTDC entered a trading halt today and shares last traded for $9.18 each.