NEXTDC Ltd, an Australian data-center operator, is eyeing a AUD 2.9 billion ($1.9 billion) syndicated loan from banks to expand its operations in Asia, including Malaysia, as demand for digital infrastructure surges, Bloomberg reported.
“The market dynamics are extraordinary, driven by the surging demand for digital infrastructure to support the rapid expansion of cloud and artificial intelligence (AI) technologies across the Asia-Pacific region,” the news agency quoted the firm’s Chief Executive Officer and Managing Director Craig Scroggie as saying.
According to Scroggie, the syndicated loan, together with a AUD 750 million ($504 million) capital raising announced Tuesday, will provide the firm with more than AUD 3 billion ($2.02 billion) to fund a rollout of nine sites across the region, including Malaysia, Japan, New Zealand and Thailand.
According to Bloomberg, the NEXTDC loan is being led by Commonwealth Bank of Australia, HSBC Holdings plc, National Australia Bank Ltd and Royal Bank of Canada.
NEXTDC said in a bourse filing on Tuesday that the company has now successfully completed an institutional placement, raising approximately AUD 550 million ($370 million) through the issue of approximately 32.1 million new shares.
The placement shares were issued at AUD 17.15 ($11.53) per share, which represents a 1.8 percent discount to the five-day volume-weighted average price and a 3.9 percent discount to the last close.
The placement was strongly supported by both NEXTDC’s existing shareholders and new investors.
The firm has also undertaken a non-underwritten share purchase plan of up to a maximum of AUD 200 million.
The proceeds received from the capital raising are intended to be applied to the acquisition of new data center development sites in Asia, as well as general corporate purposes and transaction costs.
Once acquired, the Asian sites are expected to expand the company’s data center development pipeline in Asia, which in due course will also add to NEXTDC’s planned capacity of more than 1GW based on its existing portfolio of data center sites.
“The strong support for this placement highlights continued investor confidence in NEXTDC’s growth strategy and long-term vision,
“As AI continues to drive unprecedented demand for accelerated computing, the need for scalable, high-performance digital infrastructure has never been more vital,” said Scroggie.
According to him, 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.
“Our focus remains on maintaining the agility and innovation required to power the next generation of AI-driven technologies that help enterprises harness the digital age,” he added.
It is noted that NEXTDC continues to see opportunity in the growing cloud and AI-led demand for digital infrastructure throughout core Asian markets, which it believes creates strong tailwinds for NEXTDC and its key global cloud service provider customers.
The company continues to actively evaluate and plan its expansion in these new markets, including site evaluation and negotiation in Bangkok, Thailand (BK1) and Johor, Malaysia (JB1).
In FY24, NEXTDC received foreign investment approval from Thailand’s Board of Investment (BOI) for the development of a new hyperscale data center in Bangkok.
Securing approval for foreign direct investment allows the company to advance the planning and development of a new data center in Bangkok once a suitable site has been acquired.
At the same time, NEXTDC’s planned JB1 development is expected to provide a critical next step in the expansion of NEXTDC’s existing presence in Malaysia, with practical completion of its KL1 site expected in FY26.
NEXTDC continues to invest in Malaysia as its digital economy continues to expand.
“The underlying market dynamics that continue to drive demand for NEXTDC’s leading digital infrastructure platform continue at an unprecedented pace,
“While the company is already well placed from a liquidity perspective to continue to accelerate its development activities, it is becoming clear that opportunities for value accretive investment in the near term will continue to grow in accordance with our record pipeline and strong growth in the demand for cloud and AI services,” Scroggie said.
He also says the firm is thrilled the Thailand BOI approved its investment application for a new NEXTDC hyperscale data center in Bangkok.
“In addition to our ongoing development and expansion in Malaysia, this capital raising will support another significant step in NEXTDC’s expansion efforts in Southeast Asia and underscores our commitment to delivering world class Tier IV and built-to-suit data center solutions across the region,” he added.
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