SKS Technologies (ASX:SKS) has secured an increase in its bank financing facilities from the $8 million approved by the Commonwealth Bank a year ago to $12 million.
Along with a new equipment leasing facility of $2 million, the bank guarantee facility was increased from $3 million to $5 million. A $5 million overdraft facility remains unchanged.
SKS Technologies says the 50% overall increase — only 12 months after the initial facilities were approved — reflects further confidence in the company’s strategy and its ability to execute it successfully.
The company has also received written confirmation of the intent to be engaged for a major contract to supply and install electrical systems for an unnamed international hyperscale data centre operator.
With an expected contract value to exceed $30 million, the project will begin immediately and is due for completion by December 2024.
SKS Technologies will be responsible for the design, installation, and commissioning of the electrical systems for a 28-megawatt critical environment data centre facility.
Chief Executive Officer Matthew Jinks says almost 2 years ago, SKS Technologies identified the data centre sector as an opportunity to enhance and package its skills and expertise to capture a share in a large and rapidly growing market.
“The award of this contract will take our work on hand from $51 million to more than $80 million.”
“The award of this contract will take our work on hand from $51 million to more than $80 million”
In January 2022, the business on-boarded several market sector-specific teams with the relationships, experience, and expertise to secure work in chosen targeted sectors, one of which was data centres.
The rationale for this segment rested on the relatively straightforward process of applying existing in-house competency and capacity with the newly recruited sector specialists to capture a share of a market segment experiencing rapid growth.
SKS notes that this growth is likely to only accelerate to accommodate the exponential reliance on data for many purposes across the commercial globe.
An anticipated surge in AI adoption will also create additional ‘enormous demand’ for data storage.
Jinks adds that the project more than validates the company’s strategy to enter the ‘valuable and growing’ data centre sector.
Write to Adam Orlando at Mining.com.au
Images: SKS Technologies