NextDC pauses uncontracted projects after Australian data centre woes

Sydney, November 9 - Australian data centre operator NextDC announced on Monday that it would halt work on all projects lacking customer contracts following a significant setback at its Melbourne facility. The suspension of construction on the company's flagship M3 data centre expansion in Melbourne, caused by power delays and community opposition, led to a reduction in earnings forecasts and a 42% drop in its share price last month.

NextDC CEO Craig Scroggie acknowledged the difficult situation, stating that their top priority now is to win community support for the M3 project and to address the concerns that have arisen. The company had 11 centres under development or in the planning stages, but work on these projects will be paused until the issues are resolved and trust is earned.

Goodman Group and Digital Realty, NextDC's main rivals, each purchased a 9.9% stake in the company last week, following the share price decline. While the rivals have not announced plans to make a takeover offer, they have reserved the right to do so and expressed interest in collaborating with NextDC's board and management to tackle the challenges the company is facing.