Data centre operator NEXTDC (ASX: NXT) has announced plans to purchase three new sites for future data centre developments.
The new sites, in Sydney, Melbourne, and Perth will be funded by a fully underwritten $281 million institutional placement of new shares and a non-underwritten share purchase plan.
The company says it continues to experience very strong demand for its data centre services, which is driving the group's rapid expansion.
The purchase of the sites is a strategic decision to prepare the ASX200 company for future growth and to mitigate the risks of the company running out of capacity in its key markets.
"This will allow NEXTDC to quickly respond to market demand and to optimally sequence the deployment of capital and construction of the new data centre facilities over the longer term," says NEXTDC.
Chief executive officer of NEXTDC, Craig Scroggie (pictured), says the expansion is promising for the future of the Australian tech sector.
"We are incredibly excited by the breadth and depth of these new investments that will further support the exponential growth of the digital economy in Australia," says Scroggie.
"Over time these new infrastructure developments are expected to be the largest of their kind in Australia."
The $281 million placement consists of $131 million general placement and a $150 million cornerstone placement to UniSuper.
The general placement has a price of $6.43 per share, representing a discount of 5.6 per cent to the last close.
UniSuper will take-up the $150 million cornerstone placement at a 2.5 per cent premium to the placement price.
The placement will be conducted on Tuesday 17 April 2018.
NECTDC reaffirmed its FY18 earnings guidance of $58 to $62 million, and revenue guidance in the range of $152 to $158 million.
Despite achieving sound revenue during 1H18, the group reported a significant profit drop of 56 per cent to $8.4 million.
In December 2017, NEXTDC announced its intention to wind up Asia Pacific Data Centre (APDC) based on "elevated concerns" it holds about 360 Capital Group's ability to manage APDC.
The two companies were engaged in an ongoing battle to takeover APDC throughout 2017, with 360 Capital eventually outbidding NEXTDC.
Business News Australia
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support