Following the announcement of a $5 billion financing agreement with Macquarie Asset Management for its high-performance computing data center operations, Applied Digital Corp. (APLD, Financials) rose 11.39% to $8.65 as of 1:13 p.m. ET Tuesday.
Applied Digital stated the deal comprises an initial $900 million investment to assist the 400-megawatt expansion of its Ellendale HPC Campus. According to the announcement, MAM maintains the right to commit an extra $4.1 billion in 30-month future HPC initiatives.
The money will be used to finish building the Ellendale campus, pay back about $180 million in project-level bridging debt, and recoup $300 million of equity investment. Applied Digital said the arrangement entitles it with an 85% ownership share in its HPC company, while MAM owns 15%.
The investment is planned to give resources for Applied Digital to increase its HPC capacity to 2.0 gigabytes, hence enabling artificial intelligence and machine learning applications. Preferred stock with a 12.75% annual dividend makes up the financing source; redemption opportunities start five years after closure.
Applied Digital further said that the conclusion of the purchase depends on customary closing conditions, which include negotiating leases for the Ellendale property with hyperscale consumers.
