Teraco raises R1,2bn in new funding - TechCentral

Teraco raises R1,2bn in new funding

Jan Hnizdo

Rapidly expanding data centre operator Teraco has raised a R1,2bn medium-term funding facility from Absa, allowing it to complete its new facility in Isando, east of Johannesburg, while also investing in its new, nearby data centre at Bredell.

It’s the third time Teraco has raised debt financing from Absa, and it’s by far the largest such facility to date.

“We will use the funding to further invest in the Teraco Campus in Isando,” said chief financial officer Jan Hnizdo. “The site presently has 20MW of capacity, which needs to all be brought online. We have also purchased land adjacent to the existing site allowing for further expansion.”

A component of the new funding has also been earmarked for the new data centre in Bredell. The Bredell site has 24MW of power and more than 6 000m² of technical deployment space, which means it will eclipse the existing Teraco Campus in size.

“Bredell will be the largest commercial data centre in Africa,” Hnizdo said. The site is scheduled to be finished by the fourth quarter of 2017.

Once Bredell is completed, Teraco will have a total of 50MW of capacity and 18 000m² of floor space installed across its facilities in Johannesburg, Durban and Cape Town. That’s about 40% of the installed data centre capacity across all providers in sub-Saharan Africa and about 45% of the total in South Africa, he said.

Teraco has spent about R1,5bn to date on its data centres. The current expansion at Isando will run to about R1bn in total, while the new site at Bredell is likely to require north of R1bn in investment.

Hnizdo said the company is generating cash and is Ebitda positive (meaning it’s profitable before interest, tax, depreciation and amortisation) and the money it’s making is being reinvested into building infrastructure rather than using it for dividends.

In 2015, UK-based private equity firm Permira acquired a significant stake in Teraco, replacing 18 angel investors who had funded the group since its inception in 2008. Permira and management became sole shareholders in the business following that deal.  — © 2017 NewsCentral Media

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