CDC Data Centres is preparing to raise between $4 billion and $5 billion in debt to support its extensive 1.6 gigawatt development pipeline and maintain its credit rating with Moody’s. The company, last valued at $18 billion, has enlisted Barrenjoey Capital Partners and Gilbert + Tobin to facilitate this significant funding initiative.
As of September 30, CDC reported a net debt of $4.4 billion. The company has previously secured financing from the Commonwealth Bank of Australia and the US private placement market. According to sources familiar with the situation, the board of directors, chaired by Brett Chenoweth, has yet to officially approve the debt raise, though preparations are underway. Advisers have begun discussions with major lending banks to launch the offering in the new year.
In addition to the debt acquisition, CDC anticipates needing an equity injection from its major shareholders—Infratil, Future Fund, and the Commonwealth Superannuation Scheme—within the next year. These shareholders are reportedly supportive of the initiative. The planned capital markets engagement is viewed as a critical step for CDC to maintain its current credit rating as it expands.
CDC’s recent adjustments to its valuation methodology have slightly increased its leverage, as noted in Infratil’s Australian Securities Exchange (ASX) filings. The company has established 372 megawatts of installed data centre capacity across locations in Canberra, Sydney, Melbourne, and Auckland, generating $533 million in revenue for the six months ending June 30. An additional 453 megawatts is under construction in three cities, with the overall future pipeline last reported at 1.6 gigawatts.
CDC has also made strides in expanding its footprint. In August, the company announced plans to establish a 200 megawatt data centre in Perth’s Maddington, with an initial investment of $415 million. Additionally, it has reached an agreement to lease a data centre shell to emerging cloud provider Firmus Technologies.
Recently, Chief Executive Greg Boorer claimed that CDC is operating at net-zero carbon emissions. This assertion comes in light of growing concerns regarding the data centre sector’s substantial energy and water consumption, along with its implications for utility prices and national emissions reduction targets.
The company’s enterprise valuation, as of the end of September, included $13.6 billion in equity value, underlining its significant market presence and ambition for further growth. As CDC prepares for this pivotal funding round, its strategies will be closely monitored by stakeholders and industry observers alike.
