Consolidated Water Acquires PWC Assets, Secures New Credit

TL;DR

CWCO just bought PWC's water assets in Cayman and got a new credit line. Big move for them.

AI Summary

Consolidated Water Co. Ltd. announced the completion of its acquisition of the assets of Power & Water Corporation (PWC) on May 29, 2024. This acquisition includes PWC's water and wastewater utility assets in the Cayman Islands. The company also entered into a new credit agreement on the same date.

Why It Matters

This acquisition expands Consolidated Water's operational footprint in the Cayman Islands, potentially leading to increased revenue and market share in the region's essential utility services.

Risk Assessment

Risk Level: medium — Acquisitions carry inherent integration risks and potential for unforeseen liabilities, while new credit agreements can impact financial leverage.

Key Players & Entities

• Consolidated Water Co. Ltd. (company) — Registrant
• Power & Water Corporation (PWC) (company) — Acquired entity
• May 29, 2024 (date) — Completion date of acquisition and new credit agreement
• Cayman Islands (location) — Location of acquired assets

FAQ

Key Financial Figures

• $0.60 — hich registered Class A common stock, $0.60 par value CWCO The Nasdaq Global Se
• $596,144,000 — ), on an "as-is" basis, from NSC for MXN$596,144,000 (or approximately US$35,171,000, based
• $35,171,000, b — for MXN$596,144,000 (or approximately US$35,171,000, based upon the MXN$-US$ exchange rate pub
• $24.2 million — y acquired the Land for approximately US$24.2 million through a series of transactions that b
• $20,000,000 — the BC Government will pay at least MXN$20,000,000 (or approximately US$1,180,000, based u
• $1,180,000, b — east MXN$20,000,000 (or approximately US$1,180,000, based upon the Exchange Rate) to NSC to p

Filing Documents

• cwco-20240529x8k.htm (8-K) — 55KB
• cwco-20240529xex10d1.htm (EX-10.1) — 257KB
• cwco-20240529xex99d1.htm (EX-99.1) — 20KB
• cwco-20240529xex99d1001.jpg (GRAPHIC) — 10KB
• 0001558370-24-008902.txt ( ) — 506KB
• cwco-20240529.xsd (EX-101.SCH) — 3KB
• cwco-20240529_lab.xml (EX-101.LAB) — 16KB
• cwco-20240529_pre.xml (EX-101.PRE) — 10KB
• cwco-20240529x8k_htm.xml (XML) — 5KB

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Item 1.01 Entry into a Material Definitive Agreement On May 29, 2024 (the "Settlement Date"), Consolidated Water Co. Ltd. (the "Company"), through its Netherlands subsidiary, Consolidated Water Coperatief, U.A. ("CW-Coperatief"); its Mexico subsidiary, N.S.C. Agua, S.A. de C.V. ("NSC"); and its indirect Mexico subsidiary, Aguas de Rosarito S.A.P.I. de C.V. ("AdR"), entered into a settlement agreement (the "Settlement Agreement") with the Government of Baja California (the "BC Government") and Banco Nacional de Obras y Servicios Pblicos, S.N.C., as trustee under the trust agreement for the trust named Fondo Nacional de Infraestructura (the "Trust"). The Settlement Agreement was executed to resolve a previously disclosed dispute that arose in connection with the public-private partnership agreement (the "APP Contract") dated August 22, 2016 between AdR, the Comisin Estatal del Agua de Baja California ("CEA"), the Comisin Estatal de Servicios Pblicos de Tijuana ("CESPT"), and the BC Government. Under the APP Contract, AdR was to develop, build and operate a desalination plant and its accompanying pipelines in Playas de Rosarito, Baja California (the "Project"). On June 29, 2020, CEA and CESPT sent a notice to AdR terminating the APP Contract and inviting AdR to submit a request for the reimbursement of Project-related expenses in accordance with the APP Contract and Mexican law governing the APP Contract. AdR disputed the lawfulness of the termination and submitted a reimbursement request on August 28, 2020. On April 16, 2021, CW-Coperatief, NSC and AdR notified the United Mexican States ("Mexico") that a dispute had arisen between CW-Coperatief, NSC and AdR, on the one hand, and Mexico, on the other, under the Agreement on Promotion, Encouragement and Reciprocal Protection of Investments between the Kingdom of the Netherlands and Mexico (the "Treaty"), in connection with the termination of the APP Contract and AdR's reimbursement request (the "Dispute"). On Feb

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Item 2.01 Completion of Acquisition or Disposition of Assets To the extent required by Item 2.01 of Form 8-K, the information relating to the consummation of the transaction contained or incorporated elsewhere in this Current Report on Form 8-K is incorporated by reference herein.

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Item 7.01 Regulation FD Disclosure. On June 4, 2024, the Company issued a press release announcing the transaction described in Item 1.01, a copy of which is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference. The information in this Item 7.01, including Exhibit 99.1, is furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities under that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, regardless of any general incorporation language in those filings. 3

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description 10.1 Settlement Agreement dated May 28, 2024 among Consolidated Water Coperatief, U.A.; N.S.C. Agua, S.A. de C.V.; Aguas de Rosarito S.A.P.I. de C.V.; the Government of Baja California; and Banco Nacional de Obras y Servicios Pblicos, S.N.C., as trustee under the trust agreement for Fondo Nacional de Infraestructura. 99.1 Press Release dated June 4, 2024. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CONSOLIDATED WATER CO. LTD. By: /s/ David W. Sasnett Name: David W. Sasnett Title: Executive Vice President & Chief Financial Officer Date: June 4, 2024 5

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View this 8-K filing on SEC EDGAR