Infratil announces NZ$1,150 million equity raising to fund its next stage of growth
Infratil Limited (“Infratil”) (NZX/ASX: IFT) today announced an approximately NZ$1,150 million equity raising to fund further investment into data centre operator CDC’s accelerating growth as well as provide more flexibility for growth across Infratil’s global portfolio.
The equity raising comprises an underwritten[1] NZ$1,000 million placement of new IFT shares (“Placement”) and a NZ$150 million non-underwritten retail offer of new IFT shares, with the ability to accept oversubscriptions at its sole discretion (“Retail Offer”, together the “Equity Raising”).
Infratil CEO Jason Boyes said Trans-Tasman data centre developer and operator CDC has been one of the company’s most successful investments, with its stake currently independently valued at NZ$4,420 million, ~10 times what was first invested in 2016.
“CDC continues to see a surge in demand for data centre capacity. The proceeds of the equity raising will be used to fund its accelerated growth, and provide additional balance sheet flexibility to allow Infratil to continue to invest across our portfolio.
“Demand continues to accelerate on the back of cloud adoption and significant investments in Generative AI. This rapid increase in demand has seen CDC enter advanced negotiations with customers for over 400MW of capacity at multiple sites across the CDC footprint with this capacity expected to come online over the next 4 to 5 years.”
Mr Boyes said the growth in demand has caused CDC to accelerate its development and capital expenditure plans:
– CDC’s development pipeline continues to expand with the inclusion of the Marsden Park development, a 720MW campus (more than double CDC’s current operating capacity), bringing CDC’s total planned capacity to around 1,870MW targeted to be operating or under construction by 2033
– CDC expects 200MW+ of capacity to commence construction over the next 12 months, including the first tranche of Marsden Park
Infratil expects to commit equity funding of around A$600 million to CDC over the next two years, which represents its pro-rata share of estimated funding capacity required by CDC to execute on its medium-term development pipeline.
“CDC’s growth has accelerated considerably recently, driven by rapid growth in AI-driven data demand. The growth we’ve announced today is significant, and confirms CDC is a world-class business.
“The NZ$1,150 million we are raising today will not only support the CDC team to address this growth, but also strengthens our ability to expand our renewables, digital and healthcare platforms. This additional capital, combined with the significant growth opportunities ahead, makes it an exciting time to be an Infratil shareholder.”
CDC CEO Greg Boorer said: “We are seeing an unprecedented increase in the number of customer discussions, many of which are tied to AI-related workloads. CDC has been AI-ready for more than 15 years, and is well positioned to capture strong share of AI-driven demand.
“Including reservations and rights-of-first refusals, over the last 18 months we have signed contracts for 200MW+ of capacity and we continue to see higher demand in the Australian and New Zealand markets. Our recently announced Marsden Park campus is in direct response to these demand signals and is a strong indicator of the step change in the scale of demand and development we expect to execute on in the period ahead.”
The proceeds of the Equity Raising (combined with cash on hand and currently available and undrawn debt facilities) will provide Infratil with ~NZ$1,809 million of total available liquidity[2]. Following the Equity Raising, wholly owned group gearing will be reduced from 20% to 11.8%[3].
Infratil confirms there is no change to its FY25 guidance provided at the FY24 result in May 2024.
Barrenjoey Markets Pty Limited, Goldman Sachs Australia Pty Ltd and UBS New Zealand Limited are acting as Joint Lead Managers.
