NextDC outlines $1.32 billion share sale to expand capacity

The news: Data centre operator NextDC has announced a $1.32 billion share sale to speed up the development and fit out of assets in Sydney and Melbourne amid growing demand.

The numbers: The company will raise $1.32 billion by way of a 1-for-6 pro-rata non-renounceable entitlement offer to existing shareholders, with shares to be offered at $15.40 each. NextDC shares, which were placed in a trading halt ahead of the announcement, closed at $16.71 on Wednesday after having risen more than 50% over the last 12 months.

The context: NextDC said the proceeds from the share sale, along with existing cash and bank balances, would be used to bring forward development of three data centres in Sydney, one in Melbourne, land acquisition opportunities across Asia-Pacific, and on capital expenditure. This is required to meet unprecedented growth in customer demand and take advantage of ongoing market expansion over the medium term, the company said. NextDC, which handed down a record half-year result in February, said it has a record order book of 68.8 megawatts, and reaffirmed its earnings and revenue guidance for the 2024 fiscal year.

What they said: "NEXTDC continues to see significant growth in demand for its data centre services underpinned by powerful structural tailwinds. Amid this backdrop, we have decided to bring forward the development and fitout of key assets in Sydney and Melbourne to ensure we are able to meet this growth in demand," CEO and Managing Director Craig Scroggie said in a statement.