China Data Center Firm Shanghai DC-Science Seeks Private Loan

(Bloomberg) -- Shanghai DC-Science Co., a Chinese data center developer and operator, is seeking private debt of about $600 million to $700 million to fund a project in southern Malaysia, according to people familiar with the matter. 

The private loan would be used to pay for data centers in the Malaysian state of Johor, the people said. The project, named Brightray DC, is scheduled to deliver its first phase by February, according to its website.

Discussions are ongoing, and the deal’s details are subject to change, the people added. The loan could take the form of a one-year construction financing or a convertible instrument whereby the lender could become an equity investor, one of the people said. 

The plan is just the latest example of a boom in data center financing in Asia, as companies across the region rush to meet the growing need for services linked to artificial intelligence.

A Shanghai DC-Science spokesperson said “financing details are highly sensitive and proprietary and we adhere to a strict policy of confidentiality,” without elaborating further.

Shanghai DC-Science is involved in a partnership with Malaysia-based real estate development firm MN Holdings Bhd in 2023, according to a statement from MN Holdings. 

Southeast Asia’s data consumption and computing growth will require a massive investment — as much as $60 billion — to build out technology infrastructure, including server centers, towers and fiber, according a 2023 study by consulting firm Arthur D. Little. 

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The state of Johor, which borders Singapore, has been a beneficiary of this booming demand. Global data center operator and developer Yondr Group Ltd. is seeking private debt to fund a facility in the region. 

Shanghai-based company GDS Holdings Ltd. was also considering raising around 10 billion ringgit ($2.3 billion) in loans as of August, with the money being used to fund its data center operation in Malaysia.