AirTrunk raises $450m to build Singapore data centre

BEIJING (BLOOMBERG) - Data centre start-up AirTrunk has raised $450 million in debt and equity to help build its first Singapore facility as part of a multi-billion dollar plan to become a regional technology powerhouse.

The Goldman Sachs Group and TPG Sixth Street Partners-backed company has already spent more than A$1 billion (S$964.7 million) on two data centres in Australia and will open its Singapore facility in two phases, according to founder Robin Khuda.

The first stage is expected to be ready by mid-2020 and will allow half of its planned 60 megawatt capacity to be sold to customers. The rest will be built when there's enough demand, with the total project taking up 1.5 hectares of land in Loyang, in Singapore's east, and costing "in excess" of $500 million, he said.

AirTrunk is taking advantage of the rise in cloud computing as more businesses move their IT away from self-run data centres to servers run by the likes of Amazon Web Services and Alibaba Group Holding Ltd.

Companies like AirTrunk, Digital Realty Trust Inc and Equinix Inc specialize in building cooled and powered spaces that are leased to cloud vendors and other large enterprises. But the start-up will face much fiercer competition in high-tech hubs like Singapore, where many of its rivals and potential customers have built their own infrastructure thanks to government incentive programs and global internet links.

LENDING SYNDICATE

AirTrunk's new financing includes debt and a "sizable" amount of equity raised from existing shareholders on a pro-rata basis, Khuda said, without elaborating on the specific split.

The debt, provided by Goldman, Deutsche Bank and Natixis, will be syndicated to a larger group of lenders at a later stage. It comes on top of an A$850 million five-year loan raised in 2018 for the expansion of data centres in Sydney and Melbourne, which was later increased to A$900 million as the company won new customers.

"If you compare to typical greenfield project finance facilities, in terms of level of equity or equity-like instruments to debt, it's pretty consistent with what's in the market," Khuda said in an interview. "We like to be prudent and want to make sure we're not overly leveraged."

While a portion of the funds will go into exploring other regional expansions, this won't be the last round of financing required, with Khuda saying more facilities in Hong Kong and Tokyo could be online by next year.

"We expect multi-billion dollar investments between now and 2020," he said.