PHOENIX, AZ, June 10, 2015 /CNW/ - GWR Global Water Resources Corp. ("GWRC") (TSX: GWR) today announced that the Maricopa County Superior Court judge signed the Stipulated Final Judgement in Condemnation and the Stipulated Final Order of Condemnation for the transfer of the assets of Valencia Water Company, Inc. ("Valencia"), a subsidiary of Global Water Resources, Inc. ("Global Water" or the "Company") to the City of Buckeye ("Buckeye").
The material terms of the transaction are as follows:
- Buckeye to acquire all of the assets of Valencia and assume the operations of the utility on closing;
- Buckeye to pay to Global Water US$55 million on closing, subject to a working capital adjustment; and
- Buckeye to 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 signed orders will be placed in escrow subject to typical closing conditions and Buckeye's completion of bond financing for the initial payment, which is currently underway. Global Water expects that the closing of this transaction will occur in the third quarter of 2015.
As of March 31, 2015, Valencia accounted for 6,719, or 15.3%, of Global Water's 43,866 active service connections. Completion of the transfer of assets will allow Global Water to focus on further maximizing the value of its core utilities. Approximately US$21 million of the proceeds received from the transaction will be allocated towards repaying the Company's commercial debt with MidFirst Bank.
"The Valencia asset transfer remains on schedule and we are pleased with the strong probability of a near-term closing," said Ron Fleming, President and CEO of Global Water. "While we remain focused on the closing and transition, we continue to analyze all options for the best use of proceeds to maximize shareholder value and position Global Water for optimal long term results."
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 the expected timing and completion of the condemnation transaction, and other statements contained in this release 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, including the fact that the expected completion of the condemnation transaction is subject to closing conditions, including receipt of financing by Buckeye. Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors and other factors discussed under the heading "Risk Factors" in GWRC'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