NextDC shares fall after $550m placement
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More news: NextDC shares lowered on the ASX after the data centre operator completed a $550 million placement as part of a capital raising to support the acquisition of new data centre sites across Asia.
NextDC shares fell 4.2% to $17.10 by 11:50am AEST.
Macquarie analysts reaffirmed their 'outperform' rating on NextDC, noting that they have "confidence in contract wins" while the company holds a "huge opportunity set" and "strong market position".
Goldman Sachs analysts said the placement was in line with their expectations and prior comments by NextDC that the company would enter new Asian markets in the near-term. The analysts reiterated their confidence in NextDC to continue to execute on its Asia expansion strategy, while the business remains "well capitalised to capture medium-term growth".
Citi analyst Siraj Ahmed described NextDC's placement as "another surprise equity raise", noting that it already had $2.7 billion in liquidity to fund the planned acquisitions.
What they said: "Overall, we see the equity raise as opportunistic, with the land acquisitions also reflecting the need to build a land bank given increased demand for suitable sites that also have power availability," Ahmed said.
"Key from [NextDC]'s perspective is to win and deliver on these large wholesale deals especially given its competitors, especially AirTrunk, have had more success in delivering large capacity at scale," he said.
NextDC completes $550m placement for Asia expansion
The news: NextDC has completed an institutional placement, raising $550 million through the issue of around 32.1 million new shares, as part of a $750 million capital raising to support the acquisition of new data centre sites across Asia.
The numbers: The placement shares were issued at $17.15 per share, representing a 1.8% discount to the five-day volume-weighted average price and a 3.9% discount to the last close.
The context: NextDC said the placement was strongly supported by existing shareholders and new investors. Settlement of the new placement shares is due on 13 September, with allotment a normal trading to take place from 16 September.
On Tuesday, NextDC also announced that it was undertaking a share purchase plan (SPP) with a maximum cap of $200 million, under which existing eligible shareholders will have the opportunity to apply for up to $30,000 of new fully paid NextDC shares without incurring brokerage, commissions or other transaction costs.
The SPP offer is due to open on 18 September and close on 4 October, with its results announced on 10 October.
NextDC said the proceeds from the capital raising will go towards the acquisition of new data centre development sites in Asia, as well as general corporate purposes and transaction costs.
What they said: "The strong support for this placement highlights continued investor confidence in NextDC's growth and strategy and long-term vision," NextDC CEO and managing director Craig Scroggie said.
"This successful placement ensures that NextDC is well-positioned to meet the growing needs of the cloud and AI ecosystems, while seizing new opportunities in a rapidly evolving market."
The sources: ASX announcement, ASX announcement, Macquarie research, Citi research, Goldman Sachs research
