PHOENIX, AZ, July 15, 2015 /CNW/ - GWR Global Water Resources Corp. ("GWRC") (TSX: GWR) today announced that Global Water Resources, Inc. ("Global Water" or the "Company") has closed on the transfer of the assets of Valencia Water Company, Inc. ("Valencia"), a subsidiary of Global Water, to the City of Buckeye ("Buckeye").
Through a settlement agreement for stipulated condemnation and stipulated court order, Buckeye has acquired substantially all of the assets of Valencia and today assumed the operations of the utility. Buckeye paid Global Water US$55 million on closing, plus an additional $198,000 as a result of a working capital adjustment. As of March 31, 2015, Valencia accounted for 6,719, or 15.3%, of Global Water's 43,866 active service connections.
Under the terms of the settlement, Buckeye will pay to Global Water a growth premium equal to US$3,000 for each new water meter installed within the prior service areas of Valencia for a 20-year period ending December 31, 2034, subject to a maximum payout of US$45 million. The first growth premium payment due to the Company will occur in mid-November, and will include payment for the new water meters installed during the first three quarters of 2015. Subsequently, growth premium payments will be paid quarterly.
Approximately US$21.5 million of the proceeds received from the transaction were used to repay in full, the Company's commercial debt with MidFirst Bank.
"We are very pleased to announce the closing of this transaction, which materially strengthens our balance sheet," said Ron Fleming, President and CEO of Global Water. "When combined with the ongoing phase-in of new rates, the improvement in the housing market, and the successful execution of our strategic plan to focus on our core, regulated utility assets, the fundamentals of our company are very strong."
About GWR Global Water Resources Corp.
GWRC was incorporated in British Columbia to acquire shares of U.S. based Global Water and to actively participate in the management, business and operations of Global Water through its representation on the board of directors of Global Water and its shared management of Global Water. GWRC owns an approximate 48.1% interest in Global Water, a pure-play, high growth, water resources company located in Phoenix, Arizona that owns and operates regulated water, wastewater and recycled water utilities.
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain forward-looking statements. These forward looking statements include, but are not limited to, statements that are not historical facts as well as statements identified by words such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", or the negative of these terms, or other words of similar meaning. These statements are based on our current beliefs or expectations and are inherently subject to significant uncertainties and changes in circumstances, many of which are beyond our control. Actual results may differ materially from these expectations due to changes in political, economic, business, competitive, market and regulatory factors and other factors discussed under the heading "Risk Factors" in the Company's most recent Annual Information Form. We undertake no obligation to publicly update any forward-looking statement, except as required by law, whether as a result of new information, future developments or otherwise.
SOURCE GWR Global Water Resources Corp.
For further information: Marina Proskurovsky, Investor Relations, Tel: 416.815.0700 ext. 288, Email: [email protected], www.gwresources.com