ASX aspirant Firmus appears poised to revise its initial public offering (IPO) price from $11 to $9 per share, consequently diminishing the capital anticipated from the float by approximately $1.3 billion, attributable to subdued international investor interest.
The possibility of abandoning the ambitious float is under consideration, with Nvidia emerging as a pivotal stakeholder in determining its feasibility.
The Australian Financial Review and The Australian have reported potential adjustments to the IPO pricing, referencing insider sources that indicate the market’s lukewarm response has catalyzed this reconsideration.
The Australian’s Dataroom has shed light on the hurried efforts to sustain the ASX listing – which was initially intended to be the second-largest in the history of the ASX, subsequent to Telstra’s 1997 IPO.
Sources indicate that the company and its investment banking advisors are contemplating withdrawing IPO plans, having sought additional financial backing from Nvidia, with advisors also reducing their fees.
The company’s valuation may experience a significant reduction, potentially to $30 billion, a stark contrast to the previously projected $43.7 billion market capitalization tied to the original $11 price.
As noted by Startup Daily, the proposed allocation of the anticipated $7.1 billion capital raise included retail brokers accepting bids from wholesale investors, with minimum stakes hovering around $5,000.
According to The Oz, the level of interest from brokers has been “very light,” prompting efforts to persuade offshore investors to commit further to the IPO.
Firmus was slated to present at the ongoing federal parliamentary inquiry into artificial intelligence today.
However, it informed the joint committee on Wednesday afternoon about its withdrawal, without citing specific reasons. Given the precarious status of the mega IPO, this development seems plausible.
The Financial Review highlighted that the banking syndicate representing Firmus initiated discussions with major investors on Wednesday to explore a price reduction in response to disappointing overseas demand.
Threefold Valuation
The original pricing of $11 implied a staggering equity valuation of $43.7 billion—nearly tripling Firmus’s valuation from just two months prior, when significant investments from Nvidia, Coatue, Blackstone, and the US quantitative trading firm Jane Street contributed $2.85 billion at a $15 billion valuation to fund the company’s Australian AI data centre initiative, dubbed Project Southgate.
Even at a projected $30 billion valuation, it would still represent a twofold escalation from August’s valuation.
Recent revelations indicate that CDC and Firmus terminated their Southgate partnership less than a year following its announcement, with CDC’s founder Greg Boorer stating that the two entities were “misaligned” regarding the project.
Firmus’s co-founder and co-CEO, Oliver Curtis, conveyed earlier this week that the decision to part ways was mutually agreed upon earlier this year.
Should the Firmus IPO proceed at $9 per share, this would mark an 18.2% decline, resulting in an approximate market capitalization of $35.8 billion.
However, this would concurrently diminish the total amount raised by $1.3 billion, assuming the quantity of shares issued remains unchanged.
Initial projections anticipated around $3 billion of the sought-after $5 billion capital raise to derive from pre-existing strategic investors. This led to expectations that the deal would largely be secured prior to engaging Australian retail investors.
A reduced offer price may adversely affect the paper value of current shareholders’ stakes and potentially limit available capital for the company’s capital-intensive expansion endeavors.
Current local investors in Firmus encompass Regal Partners, Wilson Asset Management, Paradice Investment Management, Ellerston Capital, Frazis Capital Partners, and Rapital Capital, while local venture capitalists have not yet participated.
Currently, Firmus operates merely 46 megawatts of capacity in Melbourne and Singapore—representing a mere 3% of its ambitious targets—while planning to develop an additional 865 megawatts across five sites in Australia and Asia within the next two years at an estimated capital expenditure of $51.71 billion, which includes the $43 billion Batam project.
| Project | New Compute Capacity | Disclosed Capital Cost | Target Operations |
|---|---|---|---|
| Launceston, Tasmania | 84MW | A$4.97bn (US$3.48bn) | Early 2027 |
| Wesley Vale, Tasmania | 23MW | A$1.29bn (US$900m) | 2027; development approval pending |
| Batam, Indonesia | 360MW | A$20.66bn (US$14.46bn) | Phased from early 2027 |
| KVTP, Kuala Lumpur | 192MW | A$11.97bn (US$8.38bn) | Phased completion from 2027 |
| SVTP, Kuala Lumpur | 206MW | A$12.83bn (US$8.98bn) | Completion during 2027–28 |
| Total | 865MW | A$51.71bn (US$36.20bn) |
As delineated by Startup Daily, Firmus had earmarked $3.46 billion for server investments and $929 million for deployment infrastructure from its proposed $7.1 billion capital raise, with 31% ($2.21 billion) allocated for liquidity reserves and related financing expenses. An additional $271 million was designated for working capital.
The fundamental construction costs remain unchanged unless the company opts to revise its operational strategies.
Securing additional funds for the proposed sites in Tasmania, Malaysia, and Indonesia amidst hesitancy from potential investors to support the “AI factory” developer will add to the company’s challenges associated with its anticipated $20.2 billion in contracted revenue from the rollout.
What initially seemed an audacious endeavor to forge one of Australia’s most substantial public companies within a mere year has begun to appear increasingly ambitious.
Firmus attained unicorn status with a $1.85 billion valuation when Nvidia invested in a $330 million raise back in September 2025; yet, it now risks a narrative reminiscent of Icarus.
Source link: Startupdaily.net.
