Cadiz Gets Extension on Pressing Debt
Cadiz Inc., the agricultural company that recently lost a deal with the Metropolitan Water District to build a major water project in the Mojave Desert, said it negotiated a three-year extension on a $35-million bank line that was to fall due on Jan. 31.
Under agreement with ING Baring Bank, Cadiz will issue new warrants giving the bank the right to acquire up to 10% of the company for “nominal consideration,” although previous company disclosures said the bank already owned the right to acquire equivalent ownership for 1 cent a share if the loan were not repaid by Jan. 30.
The company did not say whether the interest rate on the loan would change. Cadiz also said it extended the mandatory redemption date on $12.5 million in convertible preferred stock by two years, to July 2006, by reducing the conversion rate to $5.25 per common share from up to $8.
The company did not say whether other terms of the preferred issue had changed. The extensions give Cadiz some relief from what loomed as pressing financial contingencies in the wake of the MWD’s cancellation of the water project. On the news, Cadiz shares rose 65 cents to $1 on Nasdaq.
