Cadiz closed a long-term, $50 million, 7% senior secured credit facility agented by B. Riley Securities, completing a $107.5 million financing package that has enabled Cadiz to reduce its total outstanding debt, lengthen debt maturity and provide capital resources for continued asset development activities.
Cadiz used the net proceeds from the 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, represented by depositary shares which are expected to be begin trading on NASDAQ under the symbol “CDZIP” within 30 days, to repay in full its senior secured term loan with Apollo Special Situations Fund, to fund a segregated dividend account and to provide working capital.
The closing of the credit facility concludes a series of financial transactions in Q2/1 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,” Scott Slater, CEO and president of Cadiz, said. “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 credit facility replaces Cadiz’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, Cadiz has more than $25 million in cash available for general business operations plus more than $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.
“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 said.
Editor’s Note: The headline for this post was updated to clarify that a B. Riley affiliate provided the loan and B. Riley Securities agented it.