Australian data centre operator NEXTDC to raise $795 million for AI infrastructure
Sept 9 : Australia's NEXTDC said on Wednesday it seeks to raise A$1.1 billion ($795.63 million) through convertible notes, its third fundraising in just over four months, as the data centre operator ramps up investment in AI infrastructure.
- The notes will mature on September 17, 2031, and carry a holder put option in September 2029. The initial conversion price will be set at a 32.5 per cent-37.5 per cent premium to the reference share price.
- NEXTDC also intends to enter capped call transactions with an indicative cap price 70 per cent above the reference share price to reduce potential dilution.
CNA Games Guess Word Crack the word, one row at a time Buzzword Create words using the given letters Mini Sudoku Tiny puzzle, mighty brain teaser Mini Crossword Small grid, big challenge Word Search Spot as many words as you can Show More Show Less • The reference share price will be determined by a concurrent delta placement of existing shares, where shares are also sold at the same time as the fund raise to let investors hedge their exposure. • The price will not be less than A$12.40 per share, according to the Queensland-headquartered firm. • Proceeds will fund the ongoing expansion of the local data centre pipeline, the cost of the capped call deals and transaction costs, with the remainder for general corporate use. • NEXTDC expects fiscal 2027 capital expenditure of A$5.25 billion to A$5.75 billion, up about 55 per cent to 70 per cent from fiscal 2026 spending, as it boosts investment to meet AI-driven demand. • The convertible structure should prove less dilutive than a straight equity raising, allowing NEXTDC to secure funding while postponing dilution unless the shares rise enough for conversion, said Hersh Oberoi, global research director at Balfour Capital. • The deal underscores the scale of the company's funding requirements, with contracted AI-driven capacity growth requiring substantial investment before it generates revenue, Oberoi added. • The capital raising comes as Australian data centre developers face growing constraints on power and water access that threaten to slow a nationwide data centre expansion. • NEXTDC shares ended 2.2 per cent higher at A$12.79 on Wednesday. ($1 = 1.3826 Australian dollars)
- The reference share price will be determined by a concurrent delta placement of existing shares, where shares are also sold at the same time as the fund raise to let investors hedge their exposure.
- The price will not be less than A$12.40 per share, according to the Queensland-headquartered firm.
- Proceeds will fund the ongoing expansion of the local data centre pipeline, the cost of the capped call deals and transaction costs, with the remainder for general corporate use.
- NEXTDC expects fiscal 2027 capital expenditure of A$5.25 billion to A$5.75 billion, up about 55 per cent to 70 per cent from fiscal 2026 spending, as it boosts investment to meet AI-driven demand.
- The convertible structure should prove less dilutive than a straight equity raising, allowing NEXTDC to secure funding while postponing dilution unless the shares rise enough for conversion, said Hersh Oberoi, global research director at Balfour Capital.
- The deal underscores the scale of the company's funding requirements, with contracted AI-driven capacity growth requiring substantial investment before it generates revenue, Oberoi added.
- The capital raising comes as Australian data centre developers face growing constraints on power and water access that threaten to slow a nationwide data centre expansion.
- NEXTDC shares ended 2.2 per cent higher at A$12.79 on Wednesday.
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