Cadiz Inc. (NASDAQ: CDZI) has just announced that it has executed a definitive agreement with Lytton Rancheria of California, a federally recognized Native American tribe, for a $51 million investment in the Mojave Groundwater Bank. This investment represents the first tranche of financing for the construction and development of the project, which is expected to be the largest groundwater bank in the Southwest.
The $51 million investment from Lytton is the first tribal investment in the project, and it is part of the approximately $450 million in total equity capital being raised by the company through Mojave Water Infrastructure Company, LLC (MWI), the special-purpose entity formed to construct, own, and operate the project.
Cadiz will be able to draw unsecured loan proceeds up to $51 million to fund development and capital costs associated with the project. Furthermore, the $51 million loan from Lytton is convertible into membership interests in MWI on the same economic terms offered to other equity investors in MWI.
As part of the agreement, Cadiz will issue 600,000 shares of common stock at closing as a commitment fee, as well as 25,000 shares of common stock per $1 million funded on each draw.
The company is currently in the process of completing diligence with private equity investors for up to an additional $400 million in equity investment into MWI, which when combined with municipal debt and government grant financing, is expected to fund the construction of all project facilities.
This investment and agreement mark a historic milestone for Cadiz, with the company's CEO, Susan Kennedy, calling it a powerful new business model for building critical infrastructure.
For more details about the agreement, additional information has been included in a current report on Form 8K filed by the company today with the SEC.
Founded in 1983, Cadiz Inc. is a California water solutions company that aims to provide 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 cost-effective water treatment filtration technology, Cadiz offers a full suite of solutions to address the impacts of climate change on clean water access. The market has reacted to these announcements by moving the company's shares 4.39% to a price of $5.47. For the full picture, make sure to review CADIZ INC's 8-K report.
