NEXTDC (ASX:NXT) has called a special shareholder meeting over concerns about the $100 million debt facility 360 Capital Group (ASX:TGP) is seeking on behalf of Asia Pacific Data Centres (APDC) from Bankwest and National Australian Bank (NAB).
On 14 December, NEXTDC told shareholders of APDC (ASX:AJD) that the reason for the meeting was the winding up of the APDC Trust, which means realising its assets and distributing the net cash proceeds in order of priority to all members.
NEXTDC is concerned over the governance track record of the 360 Capital Group, which now controls APDC, with “limited true independent controls”.
"On 7 December 2017, the 360 Capital-appointed Board of APDC advised the market that it was proceeding with a new debt facility of $100 million provided by Bankwest and NAB with expected completion before 31 December 2017. Furthermore, APDC reiterated earlier public statements that it intended to pursue the “strategic initiatives” outlined in 360 Capital’s Bidder’s Statement," NEXTDC told shareholders.
NEXTDC had previously argued that 360 Capital’s Bidder’s Statement from 4 October advised APDC security holders of 360 Capital’s intention upon completion of its takeover bid to raise APDC’s debt facility to $100 million, with the increased debt proceeds utilised for the purposes of funding a $0.65 per security capital distribution (“Proposed Capital Distribution”).
NEXTDC believes the Proposed Capital Distribution is not in the best interests of all security holders. According to the company, this would increase APDC’s debt to “imprudent levels” and significantly elevate its risk profile, reducing both the quantum and value of future distributions and restrict APDC’s ability to fund growth initiatives.
“This was also a consistent view adopted by the previous independent Board of APDC, which had rejected capital distribution proposals made by 360 Capital on three separate occasions since 28 June 2017, having regard to the interests of all security holders,” claimed NEXTDC.
It is NEXTDC’s belief that the Proposed Capital Distribution constitutes “financial assistance” and accordingly requires approval by a special (75 per cent) resolution of APDC’s security holders, excluding interests held by 360 Capital and its associates.
“As previously advised, NEXTDC would vote against such resolutions,” the company stated.
“Given actions to date, NEXTDC has no confidence that the 360 Capital-appointed Board of APDC will seek the required security holder approvals before proceeding with the Proposed Capital Distribution.
“Accordingly, NEXTDC has chosen to convene its own meeting of APDC security holders to pursue the Wind-up Action.”
In July, NEXTDC made a multi-million dollar bid to wrest back ownership of APDC, the company that owns the property and buildings in which three of its data centres are housed.
A bidding war followed with proposals from 360 Capital and NEXTDC until the acquisition of a majority of shares on APDC being completed by 360 Capital in November.
NEXTDC submitted an application with the Australian Government Takeover Panels against the 360 Capital Group’s bid to take over APDC in October. That was rejected a couple of days later.