$57 million
credit agreement includes $20 million to support
development and construction of water supply projects
before the next drought.
LOS
ANGELES and GENEVA,
March 6,
2024 /PRNewswire/ -- Cadiz, Inc. (NASDAQ: CDZI /
CDZIP, the "Company") announced today that it has completed a
financing transaction that significantly strengthens its financial
position and provides the Company with liquidity to accelerate
development of its water supply projects in Southern California. The financing includes a
new $20 million loan to fund
operations and capital expenses associated with development of the
Company's water supply projects and extends all debt maturities to
2027.
The transaction, led by the Company's largest shareholder,
Heerema International Group Services SA ("Heerema"), received
strong support from the Company's existing lenders and
shareholders. With the completion of this transaction, the Company
has a solid financial foundation backed by its lead strategic
investor with a substantial capital base committed to the long-term
growth of the Company.
"This financing puts us in position to be delivering water
before the next drought hits California," said Susan Kennedy, Chairman and Chief Executive
Officer of Cadiz.
Cadiz owns 45,000 acres of land in the Mojave Desert with 2.5
million acre-feet of water supply, 1 million acre-feet of water
storage capacity and more than 200 miles of pipeline assets that
stretch across Southern
California. In 2022, the Company also acquired ATEC Water
Systems, a producer of specialized groundwater filtration
systems.
The aquifer system at Cadiz presently holds at least 30 million
acre-feet of water – more than the design capacity of Lake Mead,
the largest reservoir in the U.S. In 2020 the Company acquired a
220-mile idle gas pipeline from El Paso Natural Gas that transects
other major water systems in Southern
California ("Northern Pipeline"). To convert the pipeline to
carry water, the Company needs to build pumping stations and
connection facilities that enable water to be transferred and
exchanged between public water agencies in San Bernardino, Kern and Riverside counties.
The Company anticipates project design, engineering and
development of the Northern Pipeline will take place in 2024 with
construction beginning in 2025 and commencement of water delivery
as early as 2026. The Company recently announced execution of water
supply agreements for delivery of 10,000 acre-feet per year (AFY)
via the Northern Pipeline at a price not to exceed $1,650 per AFY. The Company expects to complete
negotiations for delivery of the full capacity of the Northern
Pipeline (25,000 AFY) by mid-2024.
The additional $20 million loan
provided by Heerema will carry a 7% PIK coupon and be convertible
into Cadiz common stock at a price of $5.30 per share. The Company has filed a Current
Report on Form 8-K with the U.S. Securities and Exchange Commission
providing additional information about the new financing and
related transactions, including the applicable transaction
documents. Investors are encouraged to read the Current Report and
its exhibits for further information concerning the
transactions.
About Cadiz, Inc.
Founded in 1983, Cadiz, Inc.
(NASDAQ: CDZI) is a California
water solutions company dedicated to providing access to clean,
reliable and affordable water for people through a unique
combination of water supply, storage, pipeline and treatment
solutions. With 45,000 acres of land in California, 2.5 million acre-feet of water
supply, 220 miles of pipeline assets and the most cost-effective
water treatment filtration technology in the industry, Cadiz offers
a full suite of solutions to address the impacts of climate change
on clean water access. For more information, please visit
https://www.cadizinc.com.
About Heerema
The Heerema companies deliver solutions
and create sustainable value on projects within the offshore energy
industry. Heerema manages the entire supply chain of marine project
execution, offering solutions that include design and front-end
engineering, planning, logistics, project management, and the
execution of sustainable projects worldwide. Heerema owns and
operates 3 of the world's five largest heavy lift sea vessels, two
are equipped with zero-emissions technologies. Heerema is on a
mission to make the impossible possible offshore as the leading
renewable energy marine contractor. To learn more about Heerema,
please visit: https://www.heerema.com .
FORWARD LOOKING STATEMENTS: This release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, the ability of
the Company to achieve its strategic objectives with the proceeds
of the new financing, including the Company's objectives to
complete final project design, engineering and related permitting
of the Northern Pipeline in 2024, begin construction in 2025 and
commence water delivery as early as 2026, which ability is
subject to significant business, economic and competitive risks and
uncertainties, many of which are beyond the control of the Company.
Although the Company believes that the expectations reflected in
our forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. Factors
that could cause actual results or events to differ materially from
those reflected in the Company's forward-looking statements
include potential delays in achieving our strategic
objectives resulting from delays in the supply chain for
materials or other factors detailed in the Company's Securities and
Exchange Commission filings. We undertake no obligation to publicly
update any forward-looking statement, whether written or oral, that
may be made from time to time, whether as a result of new
information, future developments or otherwise.
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SOURCE Cadiz, Inc.