Cadiz Inc., the Los Angeles company that’s trying to build a water storage and conveyance project in the Mojave Desert, announced Tuesday that it has closed a public offering that netted $10.6 million in working capital.
Separately, the company announced a refinancing of $43 million in senior debt that extends the maturity date two years until September 2019.
Cadiz, through its underwriter B. Riley & Co. of West Los Angeles, offered 1 million shares at $9.75 a share, beginning Dec. 1. B. Riley also exercised an option to purchase 150,000 additional shares, bringing the total gross proceeds to $11.2 million before the deduction of underwriting discounts and commissions.
The money will be used for working capital, business development, capital related to the implementation of the Cadiz water project, and general/administrative expenses, according to a press release from the company.
Cadiz has been trying for nearly 25 years to develop a water storage and sales project for an aquifer under its 45,000-acre holdings in the Cadiz Valley east of the Twentynine Palms Marine Corps Air Station.
The latest plan involves signed agreements with six water agencies to pump up to 50,000 acre-feet of water a year (enough to supply 400,000 families) out of the aquifer and send it via pipeline to the MWD-operated Colorado River Aqueduct.
That plan received environmental approvals three years ago and survived numerous legal challenges from environmental groups. But the planned pipeline to convey the water to the Colorado River Aqueduct hit a snag last year when the federal Bureau of Land Management rejected a proposal to place it within the right of way of a railroad. Cadiz is now trying to convince federal officials and lawmakers to overturn that ruling.
Cadiz has only a small amount of ongoing revenue from agricultural operations on the site; the vast majority of the millions of dollars spent to get approvals for the water project has come from stock offerings and debt plans.
Public policy and energy reporter Howard Fine can be reached at [email protected]. Follow him on Twitter @howardafine.
