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DXN LIMITED — Capital/Financing Update 2019
Oct 8, 2019
64806_rns_2019-10-08_682f24e9-9a4a-4503-953d-9e20ce914434.pdf
Capital/Financing Update
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9 October 2019
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ASX Announcement
$5.0 million Fully Underwritten Entitlement Issue to Fund Expansion of Sydney Data Centre and Working Capital for DXN Modules
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One (1) New Share for every four (4) Shares held at an issue price of $0.055 per Share to raise $5.0 million
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One (1) free attaching option for every one (1) Share subscribed for and issued under the Offer ($0.10 exercise price with a 1 year term)
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Firm commitments received for $1.0 million of any shortfall in advance in the form of unsecured Convertible Notes which can be converted at $0.055 per Share
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Funds raised to to double the the “ready for service” rack space at the DXN-SYD01 Data Centre, working capital for DXN Modules, working capital and offer costs
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Supported by existing and new institutional and sophisticated investors
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Director, John Baillie has agreed to act as a general sub-underwriter for $250,000
DXN Limited (the Company ) (ASX:DXN) is pleased to announce the Company has resolved to proceed with a non-renounceable pro-rata entitlement issue on the basis of one (1) new share ( New Share ) for every four (4) shares held by eligible shareholders on the record date (expected to be on or about Thursday, 17 October 2019) at an issue price of $0.055 per New Share to raise up to approximately $5.0 million (before costs) ( Entitlement Issue or Offer ).
Subscribers in the Entitlement Issue will receive one (1) free-attaching option ( New Option ) for every one (1) New Shares subscribed for and issued, exercisable at $0.10 per Option on or before the date which is one year from the date of issue. The Company intends to apply for quotation of the New Options.
To provide working capital over the offer period, the Company has received firm commitments for $1.0 million of any shortfall in advance in the form of unsecured convertible notes ( Convertible Notes ). The key terms of the Convertible Notes are as follows:
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Unsecured;
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Face value: $10,000 per Convertible Note
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Conversion/Redemption: At the election of the Convertible Note investors, either convertible at $0.055 per Share on the Maturity Date or redeemable in cash;
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Maturity Date: the earlier of the Entitlement Issue shortfall settlement date and 31 December 2019;
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Interest Rate: 12% per annum (or part thereof) payable in cash;
DXN Limited
ABN: 46 620 888 548
9 Mumford Place, Balcatta, Perth, Western Australia, 6021 W: dxn.solutions | T: 1300 328 239 | E: [email protected]
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Options: each Share that is converted pursuant to the Convertible Notes will receive one (1) New Option for every Share converted.
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If there is not sufficient shortfall from Entitlement Issue and Convertilbe Note holders elect to convert on the Entitlement Issue shortfall settlement date, the Company will issue the Shares and New Options the subject of the conversion under its available ASX Listing Rule 7.1 capacity.
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Events of default: Standard events of default.
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Other terms: The convertinle note agreements pursuant to which the Convertible Notes are issued contains such additional and supplementary provisions, including, without limitation, customary representations and warranties.
The funds raised from the Entitlement Issue and Convertible Notes will be applied towards:
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Sydney Data Centre DXN-SYD01 Expansion - completion of the next 400kW of “ready for service” rack space (taking the total to 800kW of “ready for service” rack space) as well as a high voltage upgrade to take the power capacity to approximately 2.5MW at – $3.0m;
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• DXN Modules working capital - $1.0m; and
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General working capital and offer costs $1.0m.
Mathew Madden, CEO of the Company said:
“Following the timely completion of construction of the DXN-SYD01 Data Centre, the Company is pleased to offer shareholders the ability to participate in the continued growth of the company as it raises funds to double the “ready for service” rack space at the DXNSYD01 Data Centre. Additionally, funds raised will be used to upgrade high voltage power capacity to approximately 2.5MW, provide working capital for DXN Module business and for general working capital.
The Company has a large and growing pipeline in both its DXN Data Centre and DXN Modules businesses and we have set our self the goal of achieving sales of 1MW of rack space at the DXN-SYD01 Data Centre and $12m in Modules sales over the next 12 months.
Whilst the company assesses early stage interest from a number of large international businesses for anchor tenancy and resolves power capacity at the DXN-MEL01 Data Centre, the Company has taken the prudent step to halt development and capital expenditure. The Company is also exploring a short-term sublease which may further reduce operating expenses over the coming period.
I am excited by the significant opportunities in the edge, modular and colocation markets and by our plans to capitalise on these growing markets. On behalf of the Board, I urge shareholders to consider subscribing for your Entitlement and thank you for your past support of the Company.”
DXN Limited
ABN: 46 620 888 548 9 Mumford Place, Balcatta, Perth, Western Australia, 6021 W: dxn.solutions | T: 1300 328 239 | E: [email protected]
New Shares and New Options issued under the Offer (totaling up to 90,317,931 New Shares and up to 90,317,931 New Options) will be listed on the ASX with the New Shares ranking pari-passu with existing fully paid ordinary shares.
Pinnacle Corporate Finance Pty Ltd ( Pinnacle ) has been engaged as Lead Manager to the Offer and Lucerne Investment Partners are acting as Co-Managers to the Offer. Pinnacle has executed an underwriting agreement with the Company whereby Pinnacle has agreed to fully underwrite the Offer to $5.0 million, subject to standard market termination events and condition precedents to an offer of this nature.
Pinnacle has entered into a general sub-underwriting agreement with Non-Executive Director, John Baillie for $250,000.
Further information with respect to the Offer will be disclosed in a Prospectus, intended to be lodged with the ASIC on or about 11 October 2019 and mailed to eligible shareholders shortly after the record date. Shareholders may view the Company’s ASX announcements, including those relating to the Offer, on the ASX website under the ASX code DXN.
Persons should consider the Prospectus before deciding whether to acquire securities and eligible shareholders will need to complete the personalised entitlement and acceptance form that will accompany the Prospectus in order to apply for New Shares and attaching New Options under the Offer.
Key dates for the Offer
| Event | Proposed Date |
|---|---|
| Lodgement of Prospectus with the ASIC | 11 October 2019 |
| Lodgement of Prospectus & Appendix 3B with ASX | 11 October 2019 |
| Notice sent to Optionholders | 11October 2019 |
| Notice sent to Shareholders | 14 October 2019 |
| Ex-date | 16 October 2019 |
| Record Date for determining Entitlements | 17 October 2019 |
| Prospectus sent out to Shareholders & Company announces this has been completed |
21 October 2019 |
| OpeningDate | 21October 2019 |
| Last date to extend the closing date | 30 October 2019 |
| Closing Date* | 4 November 2019 |
| Shares and Options quoted on a deferred settlement basis | 5 November 2019 |
| ASX notified ofundersubscriptions | 6November 2019 |
| Issue date/Shares entered Shareholders’security holdings | 11 November 2019 |
| Quotation of Shares and Options issued under the Offer | 12 November 2019 |
The Directors may extend the Closing Date by giving at least 3 Business Days’ notice to ASX prior to the Closing Date. As such the date the Securities are expected to commence trading on ASX may vary .*
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DXN Limited
ABN: 46 620 888 548 9 Mumford Place, Balcatta, Perth, Western Australia, 6021 W: dxn.solutions | T: 1300 328 239 | E: [email protected]
About DXN
DXN designs, builds, owns and operates data centres. Offering integrated, customised and tailored solutions to clients, DXN provides businesses with the option of delivering solutions to site through containerised modules, or space in DXN’s modular colocation facilities to suit technical specifications and operational requirements. From a single rack in the colocation facilities through to fully customised Edge Infrastructure, DXN can deliver a range of solutions to meet modern data centre requirements. DXN has achieved an industry first and become the first modular data centre developer in the world to receive both Uptime Institute TIER-Ready III and TIER-Ready IV design review awards.
To find out more about DXN’s Modular Colocation facilities visit www.dxn.solutions
For more information please contact:
Mr Mathew Madden
CEO T 1300 328 239
DXN Limited ABN: 46 620 888 548 9 Mumford Place, Balcatta, Perth, Western Australia, 6021 W: dxn.solutions | T: 1300 328 239 | E: [email protected]