Cadiz Completes $107.5M Refinancing Package

Rhea-AI Summary

Cadiz Inc. (NASDAQ: CDZI) announced the closure of a $50 million senior secured credit facility, part of a larger $107.5 million financing package aimed at reducing debt and funding asset development. The new facility lowers debt from a previous 9.5% to 7%, extending the maturity to July 2024. Proceeds will also cover a senior secured term loan and provide working capital. The company has over $25 million in cash for operations and $10 million allocated for upcoming dividends on its Series A Preferred Stock. This supports Cadiz's mission to address California's water resource challenges.

Positive

• Secured a $50 million credit facility, reducing total outstanding debt.
• Lowered borrowing interest rate from 9.5% to 7%.
• Extended debt maturity to July 2024.
• Increased cash reserves to over $25 million for operations.

Negative

• None.

LOS ANGELES, July 7, 2021 /PRNewswire/ --  Today, Cadiz Inc. ("the Company," NASDAQ: CDZI) is pleased to announce the closing of a new, long-term $50 million, 7% senior secured credit facility agented by B Riley Securities, Inc. (the "BRS Credit Facility"), successfully completing a $107.5 million financing package that has enabled the Company to reduce its total outstanding debt, lengthen debt maturity and provide capital resources for continued asset development activities.

The net proceeds from the BRS Credit Facility, combined with the net proceeds from its recently closed underwritten registered public offering of $57.5 million of 8.875% Series A Cumulative Perpetual Preferred Stock  (the "Series A Preferred Stock"), represented by depositary shares which are expected to be begin trading on NASDAQ under the symbol "CDZIP" within 30 days, were utilized to repay in full the Company's senior secured term loan with Apollo Special Situations Fund, LP(the "Existing Credit Agreement"), fund a segregated dividend account and provide working capital.  

The closing of the BRS Credit Facility concludes a series of financial transactions in Q2 2021 that also supported the Company's acquisition of the Cadiz Northern Pipeline and ongoing infrastructure development at the Company's properties.

"This important financing package has significantly reduced the Company's leverage and we believe has positioned the Company well to execute on our mission of contributing our unique assets to address California's deepening water resource challenges," said Scott Slater, Cadiz CEO and President.  "We are grateful for the diligent efforts of B. Riley Securities and the other joint book runners and managers to successfully complete these significant transactions for the Company."

The BRS Credit Facility replaces the Company's outstanding debt with a reduced borrowing level of $50 million and a maturity date of July 2024. The new facility will accrue interest at 7% per annum, a reduction from the Existing Credit Agreement of 9.5% per annum. 

Following the closing of second quarter financial transactions, the Company has over $25 million in cash available for general business operations plus over $10 million in a segregated dividend account for eight quarterly dividend payments on the Series A Preferred Stock.  This balance is net of the $19 million payment the Company made in June to El Paso Natural Gas to complete the acquisition of the 220-mile Cadiz Northern Pipeline announced via press release on July 1st.

Additional details regarding the BRS Credit Facility, the Series A Preferred Stock and depositary shares, are provided in the July 1, 2021, Prospectus Supplement (Form 424) to the Company's shelf registration statement on Form S-3 (Registration No. 333-257159) (the "Registration Statement") initially filed with the Commission on June 17, 2021, and declared effective by the Commission on June 25, 2021 and Form 8-K filed today.

"In the third quarter, the Company will focus on continuing sustainable asset and infrastructure development at its properties including critical investment in water supply facilities that can benefit California communities," Slater added.

To learn more about the Company's mission and projects, please visit cadizinc.com.

About Cadiz Inc.

Founded in 1983, Cadiz Inc. (NASDAQ: CDZI) is a California business dedicated to sustainable water and agricultural projects.  We own 70 square miles of property with significant water resources in Southern California and are the largest agricultural operation in San Bernardino, California, where we have sustainably farmed since the 1980s.  We are also partnering with public water agencies to implement the Cadiz Water Project, which was named a Top 10 Infrastructure Project that over two phases will create a new water supply for approximately 400,000 people and make available up to 1 million acre-feet of new groundwater storage capacity for the region.  Guided by a holistic land management plan, we are dedicated to pursuing sustainable projects and practicing responsible stewardship of our land, water and agricultural resources.  For more information, please visit www.cadizinc.com.

FORWARD LOOKING STATEMENT: This release contains forward-looking statements that are subject to significant risks and uncertainties, including statements related to the future operating and financial performance of the Company and the financing activities 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 the Company's ability to maximize value for Cadiz land and water resources, the Company's ability to obtain new financing as needed, the receipt of additional permits for the water project and other factors and considerations detailed in the Company's Securities and Exchange Commission filings, including the Annual Report on Form 10-K for the year ended December 31, 2020.  All forward-looking statements contained in this release speak only as of the date on which they were made and are based on management's assumptions and estimates as of such date.  We do not undertake any obligation to publicly update any forward-looking statements, whether as a result of the receipt of new information, the occurrence of future events or otherwise.

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SOURCE Cadiz Inc.

FAQ

What is the recent financing package announced by Cadiz Inc. (CDZI)?

Cadiz Inc. announced a $50 million credit facility as part of a $107.5 million financing package to reduce debt and fund asset development.

How has Cadiz Inc. (CDZI) improved its debt situation?

The company reduced its debt interest rate from 9.5% to 7% and extended the maturity date to July 2024.

What are the cash reserves of Cadiz Inc. (CDZI) after the recent financing?

Following the financing, Cadiz Inc. has over $25 million in cash available for general business operations.

How will Cadiz Inc. (CDZI) use the proceeds from its financing?

The financing proceeds will repay existing debt, fund a segregated dividend account, and provide working capital.

What is the significance of the Series A Preferred Stock for Cadiz Inc. (CDZI)?

The Series A Preferred Stock is part of the recent public offering and will provide dividends, with over $10 million allocated for eight quarterly payments.