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NEXTDC launches $1.3b capital raising to fund development of Australian data centres

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By Imelda Cotton - 
NextDC ASX NXT entitlement offer capital raising

Technology company NEXTDC (ASX: NXT) has launched a $1.3 billion capital raising to accelerate the development and fit-out of a digital infrastructure platform for its core Australian markets.

The work has been fuelled by “unprecedented growth in customer demand” and will allow the company to take advantage of ongoing market expansions over the medium-term.

The raising will be achieved through a fully-underwritten entitlement offer of new NEXTDC shares priced at $15.40 each, representing a 6.8% discount to the theoretical ex-rights price of $16.52.

Eligible shareholders will be invited to subscribe for one new share for every six ordinary shares already held in NEXTDC.

New shares issued under the entitlement offer will be fully paid and rank equally with existing ones.

Eligible shareholders will also be invited to participate in an institutional entitlement offer.

Development works

Proceeds from the capital raising will be used to largely fund development works at data centres dedicated to the Sydney and Melbourne markets.

These will include a $400 million capacity boost to 50 megawatts at the S3 Sydney data centre, a $350m fast-tracking project deploying critical high-voltage infrastructure and installing an initial 10MW of capacity for S4 Sydney, a $300m Stage 1 building work project for S5 Sydney and a $330m expansion of the M2 Melbourne data centre to 60MW capacity.

A further $500m will be spent on identified land acquisition opportunities in the Asia-Pacific region which are at various stages of evaluation, while $643m will be allocated to capital expenditure for the second half of 2024.

Data centres

NEXTDC owns 15 data centres in Brisbane, Canberra, Sydney, Melbourne, Darwin and Perth, with capacity ranging from 6MW through to 300MW.

It is currently planning five new centres for regions including New Zealand and Malaysia and is evaluating potential sites in Tokyo and Singapore.

In February, the company handed down a record half-year result with a total revenue of $209.1m and underlying EBITDA of $102m.

NEXTDC’s growth in customer demand is highlighted by a record forward order book of 68.8MW.

It anticipates this demand will convert into billings from financial year 2025 onwards, driving future growth in revenues and earnings.