Australian data center company NextDC wants to raise AU$672m ($404m) to fund a new facility in Sydney. However the company has warned that long-term effects of the Covid-19 outbreak are causing uncertainty.
Investment banks Citi and RBC Capital Markets are handling offers designed to fund growth including additional data halls and new site acquisitions. At a cost of AU$7.80 ($4.70) per share, the company is offering a discount from its regular share price of around AU$9 ($6).
NextDC is buildings its new S3 facility in Sydney's Gore Hill, 10km from the central business district and 7km and 8km from NextDC’s S1 and S2. The first phase is expected to cost AU$350m ($210m). The initial IT load is expected to be 12MW, with a total capacity of 80MW expected by the first half of 2022.
Growth - and Covid-19 uncertainty
"Based on the strong level of orders already received for S2 and our growing confidence in the forward sales pipeline, NextDC is confident that the projected demand in Sydney, together with our return expectations, warrants the next phase of investment in Sydney's third generation of data centers," NextDC’s CEO Craig Scroggie told shareholders.
"NextDC continues to see significant demand for its data center services during a turbulent market environment due to COVID-19," he added.
Due to the COVID-19 outbreak, NextDC has been warning shareholders about, uncertainty over the government response, and a possible Australian economic recession.
“If operations are interrupted or suspended for a prolonged period as a result of any such events, there may be a material adverse impact on the operating and financial performance and prospects of NextDC."
For the first half of the financial year, NextDC reported an AU$11m ($6m) jump in revenue to AU$95m ($57m). However, the company saw an increased net loss of nearly AU$5m ($3m) compared to AU$3m ($600,000) posted for the first half of 2019.