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Digital 9 faces £105m shortfall in latest fund raising

Thor Johnsen Digital 9.jpg

A fall in technology stocks since the start of 2022 means that Digital 9 Infrastructure raised less that half of its hoped-for £200 million placement this week.

The company, which owns subsea cable company Aqua Comms, said yesterday that it had raised £95.2 million in new shares, well under the target set two weeks ago.

But Thor Johnsen (pictured), head of digital infrastructure at Triple Point, Digital 9’s investment manager, told Capacity this morning: “There’s always next time if we need more money.”

He noted that Digital 9 has raised a total of £845 million so far, including the £300 million in its initial public offering in March 2021.

“That’s a lot of capital,” said Johnsen, who added that Digital 9 has a good pipeline of potential investments. “The opportunities are more than we expected.”

He wouldn’t speculate about future investments. “Nothing is ever done until it’s done.” The company owns, apart from Aqua Comms, the Verne Global data centre in Iceland, as well as land for data centres and a cable landing station in north-east England.

It is also investing in Europe Middle-East India Connect 1 (EMIC-1), a subsea project designed to connect France to India that Aqua Comms will manage.

Two weeks ago, Digital 9 said it will spend €76 million on an initial 56% stake in Eircom’s Tetra Ireland Communications, which runs public-safety networks for police and other emergency services. It has the option to increase its holding to 100% for a further €60 million.

Jack Waters, the former Zayo executive who chairs Digital 9, said: “The company continues to make significant progress in building a diversified portfolio of digital infrastructure assets with sustainability at their core, whether the environmental credentials of the Verne Global data centre platform or the increase in connectivity provided by Aqua Comms and the new EMIC-1 subsea cable.”

But the sentiment since the start of the year has affected Digital 9’s fund-raising this week, Johnsen told Capacity. “The truth is that when we look at the markets and what’s gone on this year to date, the market’s just got crushed.”

The Financial Times noted on Tuesday that “giants such as [Google owner] Alphabet have lost about a tenth of their market value” since the start of 2022, and “the S&P 500 has fallen 8% from its high point at the start of the year”.

Waters said: “We very much appreciate the continued support of our shareholders and new investors, particularly in the current volatile market, and look forward to reporting on the deployment of these funds, together with our anticipated debt funding, in due course.”

 

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