NEXTDC TARGETS $120M TO KEEP PACE WITH GROWTH

NEXTDC TARGETS $120M TO KEEP PACE WITH GROWTH

NEXTDC Limited (ASX:NXT) has launched an institutional placement to raise $120 million in a bid to fast-track expansion plans, off the back of boosting its notes offering last week.

The technology company will invest the capital in developing new data centres in Brisbane and Melbourne as existing facilities approach capacity constraints.

The fully underwritten placement to institutional investors hopes to raise $50 million at $2.55 per share, in line with NEXTDC's last closing price on November 20. This will be combined with a non-renounceable 1-for-6.23 entitlement offer to raise $70 million at $2.25 per share.

The placement follows the company's successful Notes II offering last week, which was increased to $100 million with $30 million in oversubscriptions.

NEXTDC CEO Craig Scroggie says growth at existing centres in Brisbane and Melbourne will support the company's expansion strategy.

"Both B1 and M1 have proven to be highly successful facilities for the company in a relatively short period of time," Scroggie says.

"We are confident that the ongoing demand in these geographies, together with our return expectations warrants this next phase of investment in markets we know well."

The initial investment in the new facilities will be between $175 million to $200 million over the next 12 to 18 months. NEXTDC is looking at a number of sites, with the centres expected to be commissioned in the second half of FY17.

The company is on track to achieve its FY16 revenue guidance of $85 million to $90 million.

The retail entitlement offer will close on December 11.

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