Data centre start-up NextDC has defended its decision to raise $10 million more than expected from its offer to existing shareholders, saying the funds will position the company to pursue additional growth opportunities.
Last month, the data centre operator announced it had successfully raised $33.6 million in capital and intended to raise a further $5 million through a share purchase plan offered to existing shareholders.
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But the company said yesterday it had accepted all-comers and has raised $15.3 million instead.
NextDC chief executive Bevan Slattery says the company – which operates in Sydney, Melbourne and Brisbane – has no new investment plan outside what it told the market when it set the $5 million target.
He said the funds will position NextDC to pursue additional growth opportunities in Perth, Auckland and Canberra, and establish the company as a market leader.
NextDC has called an extraordinary general meeting on April 27 to seek shareholder approval for the issue of the additional shares.
Between the share placement and share purchase plan, the company has raised $47.2 million, just four months after the company first listed on the Australian Securities Exchange.
Slattery, whose stake in the company has been diluted down from 50% to 35%, says NextDC now has plenty of capital, with more than $100 million in equity.
“It’s absolutely not our intention to do any capital raising for some time. I’m happy with what we’ve got at the moment,” he says.
Slattery says the company is already in discussions with potential clients for its data centres, including corporate and government bodies.
“We’re particularly focusing on state government markets at this point… If the [current NSW data centre panel tender] fails to eventuate, we’ll be delighted to be actively involved in any new panel they have,” he says.
NSW’s data centre program is part of a plan by the state government to consolidate its 130 data centres into two, but the process has been fraught with controversy.
The Government put out a call to prospective contractors, but only Macquarie Capital Group and Leighton Contractors remained in the race.
However, Springfield Land Corporation, a key part of the Leighton line-up, has confirmed it has withdrawn its bid to build a data centre for the NSW Government.
Springfield built the Polaris data centre in Queensland as part of a joint venture with Suncorp and recently announced plans to build a $200 million data centre in Melbourne.
A spokeswoman for Leighton Contractors says the company is still bidding for the NSW data centre business, but declined to comment on the implications of Springfield’s decision to withdraw. Macquarie Capital also declined to comment.
There is now mounting pressure on the NSW Government to abandon the data centre plan and consider cloud computing or leverage Federal data centre initiatives.