Heerema to acquire $21.2 million Senior Secured Loan and provide the Company an additional $20 million to fund capital investments for revenue generation, operations and growth.
LOS ANGELES and GENEVA, Feb. 21, 2024 /PRNewswire/ -- Cadiz, Inc. (NASDAQ: CDZI / CDZIP, the "Company") and Heerema International Group Services BV ("Heerema"), the Company's largest shareholder, are pleased to announce a new financing agreement to support growth and capital investments in the Company's water supply, pipeline, filtration and storage assets. Under the agreement, Heerema will acquire the Company's $21.2 million Senior Secured Loan held by BRF Finance Co., LLC, ("BRF") and provide the Company an additional $20 million to support capital investments and growth. The Maturity Date of the combined $41.2 million Senior Secured Loan will be extended to 6/30/2027. As part of the agreement, the holders of the Company's existing $16 million Junior Convertible Loan have also agreed to extend their Maturity Date to 6/30/27. Following the transaction, the Company will have no debt due prior to 2027.
"Heerema's support has been the Company's most important strategic asset," said Susan Kennedy, Chairman and Chief Executive Officer of Cadiz. "Our business transformation is on track and with Heerema's support, Cadiz is in a strong position to continue executing against strategic objectives and deliver value to shareholders on the fastest possible timeframe."
"Heerema's vision is aligned with Cadiz in every respect, and we believe in the Company's future," said Pieter Heerema. "Never before has there been such an urgent need for large-scale investment in clean water infrastructure. The problem is global, and we believe Cadiz's solutions have regional and global application."
Cadiz is a clean water solutions company 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 strategically located in Southern California. The Company also acquired water technology company ATEC Water Systems in 2022, a producer of specialized groundwater filtration systems.
The Heerema Group is one of world's largest and most respected marine contractors in the renewable energy industry and a globally known pioneer in decarbonization, sustainability and social responsibility. Heerema has been providing solutions for some of the world's most complex offshore energy projects since it was founded in 1948. Today, Heerema is leading the clean energy transition as a key supplier for the world's largest offshore wind energy projects in the United States, United Kingdom, Taiwan and Germany. Heerema's commitment to Net-Zero GHG emissions by 2050 has earned the company international recognition. In 2020, Heerema became the first marine contractor to become climate neutral by offsetting 100% of its approximately 250.000 metric tons of emissions per year. Heerema's Sustainability Roadmap includes introducing zero-emission technologies, among which are carbon capture and storage onboard their fleet of offshore crane vessels, and the use of alternative fuels such as Hydrotreated Vegetable Oil (HVO) which has the potential to reduce the carbon footprint in the shipping industry (well-to-exhaust) by up to 80%. In 2023, Heerema won the International Marine Contractor's Association Award for most innovative offshore project for reducing noise pollution.
The additional $20 million in capital to be 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 transaction remains subject to execution of definitive transaction documents and is expected to be completed expeditiously.
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 Company's ability to complete the expected financing transaction with Heerema, and the ability of the Company to achieve its strategic objectives with the proceeds of such financing, 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 our ability to reach definitive agreements with Heerema and the existing lenders under the Company's existing credit agreement, our strategic objectives may take longer to realize than expected, we may experience 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.
SOURCE Cadiz, Inc.
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