By Kumar Tanishk
Sept 9 (Reuters) – 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.
Here are some details:
• 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%-37.5% premium to the reference share price.
• NEXTDC also intends to enter capped call transactions with an indicative cap price 70% above the reference share price to reduce potential dilution.
• 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% to 70% 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% higher at A$12.79 on Wednesday.
($1 = 1.3826 Australian dollars)
(Reporting by Kumar Tanishk in Bengaluru; Editing by Eileen Soreng and Janane Venkatraman)
