NextDC share price halted amid $618 million cap raise

NextDC shares will resume trading on Monday after management announces the outcome of the $618 million capital raising.

| More on:
Woman holding out her hand, symbolising a trading halt.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The NextDC share price is frozen today
  • The ASX 200 tech share is raising $618 million to fund two new data centres in Malaysia and New Zealand
  • NextDC updated its FY23 guidance

The NextDc Ltd (ASX: NXT) share price is frozen today at $11.78 at the company's request.

The S&P/ASX 200 Index (ASX: XJO) tech share has been a strong outperformer in 2023. As you can see in the chart below, the NextDC share price is up 31% year to date.

The NextDC share price freeze will lift on Monday after management announces the outcome of the institutional component of an accelerated entitlement offer.

What's all that about?

Read on.

Why is the ASX 200 tech company raising $618 million?

This morning NextDC reported it will develop two new data centres as part of its regional expansion strategy.

The centres will be constructed on recently acquired commercial property sites in Kuala Lumpur, Malaysia and Auckland, New Zealand.

The new projects, alongside an accelerated fit out at its S3 centre, will be funded by a $618 million fully underwritten 1 for 8 pro-rata accelerated non-renounceable entitlement offer.

The offer prices of $10.80 per share represents a discount of just over 8% from the current NextDC share price.

This led NextDC to also update its FY23 guidance. The new forecast is for:

  • Data centre services revenue in the range of $350 million to $360 million (previously the upper end of the $340 million to $355 million range)
  • Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) in the range of $192 million to $196 million (previous range: $190 million to $198 million)
  • Capital expenditure in the range of $670 million to $720 million (previous range: $620 million to $670 million)

Commenting on the new developments that could offer the NextDC share price some tailwinds in the year ahead, CEO Craig Scroggie said, "Building upon the success we have achieved in Australia over the past decade, we aim to replicate our proven business model in these new markets."

Hinting at further growth plans, Scroggie added, "New Zealand and Malaysia are just the first greenfield geographic expansion opportunities outside of Australia."

NextDC share price snapshot

The NextDC share price is up 15% over the past full year. Longer-term the ASX 200 tech share has gained 57% over five years.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Capital Raising

A man slumps crankily over his morning coffee as it pours with rain outside.
Gold

Why is this ASX gold share crashing 22% today?

Let's find out why this gold miner is down in the dumps on Tuesday.

Read more »

Man with his hand out, symbolising a trading halt.
Technology Shares

Why is the Appen share price frozen today?

This high-flying AI stock has requested a trading halt this morning.

Read more »

A man slumps crankily over his morning coffee as it pours with rain outside.
Capital Raising

Guess which ASX 300 copper stock is crashing 12% today

Let's see what is causing this stock to sink deep into the red.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Capital Raising

Why is this ASX 300 stock crashing 18% today?

Let's see what is making investors hit the sell button today.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Healthcare Shares

Why is this ASX All Ords stock sinking 14% on Friday?

Let's see why investors hitting the sell button today.

Read more »

Data Centre Technology
Capital Raising

NextDC share price drops on $750m capital injection for Asian expansion

The data centre operator is raising funds to support its expansion.

Read more »

Kid stacking coins from the jar.
Capital Raising

This ASX 300 stock is rising after completing its next step for Canadian growth

Expanding in Canada could be a patently good idea.

Read more »

Successful group of people applauding in a business meeting and looking very happy.
Capital Raising

Guess which ASX All Ords stock is leaping 9% after raising $60 million

This fast-growing company is maintaining a lean balance sheet while making an accretive acquisition.

Read more »