UNITED KINGDOM: Kao Data lining up GBP 1bn debt raise

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Kao Data is understood to be in the early stages of a GBP 1bn debt raise, according to NPM sources.

Nomura Greentech is believed to be working with the data centre operator on the process.

According to sources, the transaction will involve the refinancing of existing debt as well as an additional capex facility. The financing is expected to take the form of scalable senior debt, with a junior debt component also under consideration, one source said.

Initial approaches to the lending market are underway, according to sources, and existing lenders are expected to be interested.

In January 2024, the Goldacre – Noé Group (12%), Legal & General Capital (36%), and Infratil (52%)-backed developer, announced that it had completed a GBP 206m debt raise – with an accompanying accordion facility extendable to GBP 356m – with Deutsche Bank to accelerate its data centre platform.

Kao currently has a portfolio of at least seven data centres, including fully operational and planned facilities in the UK.

Sites within its Harlow campus include the operational KLON-01 and KLON-02 projects, with 8.8 MW of IT capacity each. Additionally, a 17.6 MW KLON-03 project is under development, while a fourth KLON-04 site with up to 36 MW of IT capacity is planned. When fully developed, the campus will deliver 71.2 MW of IT capacity.

The KLON-05 site, located in Northolt, has 4 MW of operational capacity, while a further 20 MW is live at its KLON-06 facility in Slough. A further 33 MW is under construction at the KMAN-01 site in Manchester, which represents and investment of GBP 350m.

As exclusively reported by NPM in February this year, Kao’s chief commercial officer Spencer Lamb noted that national grid constraints are delaying development at the KLON-04 site. The ultimate aim is to have the project operational by the end of 2028.

Further developments, dubbed KLON-07 and KLON-08, are also planned but further information is not yet available.

Goldacre, Infratil, KAO, Legal & General Capital did not respond to a request for comment. Nomura Greentech declined to comment.