Nebius closes $4.34 billion convertible debt funding round
Plans to fund growth with customer prepayments, equity-debt mix
Nebius sees AI cloud services as future growth driver
By Toby Sterling
AMSTERDAM, March 22 (Reuters) - Nebius NBIS.O closed a $4.34 billion convertible debt funding round on Monday, with a company executive saying that the European AI infrastructure firm is now "well-funded" to meet its 2026 capital spending plans of $16 billion to 20 billion.
The financing caps a month in which Nebius sold $2 billion of share warrants to Nvidia NVDA.O and sealed a deal worth up to $27 billion to supply Facebook-owner Meta with data center capacity, underscoring investor appetite for AI infrastructure.
Chief Communications Officer Tom Blackwell said the company will keep expanding and may strike additional deals like the Meta contract, which followed a $17.3 billion supply deal with Microsoft in September.
"We'll continue to consider these types of deals as we go, just because if they're structured in the right way, they can be a very efficient source of capital," he said.
STRATEGIC FOCUS ON AI CLOUD
Blackwell said the big contract wins were not only a validation of its expertise, but also a way to fund a business that will sustain it in years beyond the current AI demand frenzy - offering AI cloud services to firms on top of the physical infrastructure it provides.
He rejected the idea that Nebius is expanding too quickly and will be left vulnerable in a downturn. "As long as enterprise AI adoption does continue to increase... the need for what we're doing is going to make sense," he said.
Nebius plans to fund 60% of growth from customer prepayments - largely Microsoft and Meta - and 40% through a mix of equity and debt, Blackwell said.
On March 10, the firm sold $2 billion in share warrants to Nvidia at a share price of $94.94. Monday's convertible bond offering was increased amid strong demand, Blackwell said.
It featured a rate of 2.63% for notes due in 2033, with conversion at roughly 90% above the company's closing stock price Friday of $117.62.
"We've managed to achieve a significant amount of funding while really minimizing the dilution," he said.
(Reporting by Toby Sterling; Editing by Arun Koyyur)
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