Consolidated Water Co. Ltd., which develops and operates seawater conversion plants and water distribution systems in areas where natural supplies of drinking (i.e., potable) water are scarce, completed the previously announced purchase of the seawater desalination production, distribution and storage facilities that currently supply the Hyatt Hotel and golf course on Grand Cayman Island. The facilities were constructed by Hyatt before a change in Cayman law that prevents individual hotel properties from constructing their own water production plants in Consolidated Water Co.'s exclusive license area. Responsibility for their operation was assumed with effect from February 1, 2002.
The company purchased the feed wells, a 430,000 (US) gallon-per-day (gpd) reverse osmosis water desalination plant, an 840,000 (US) gallon storage facility, discharge wells, and distribution facilities for approximately $1.5 million (US). The purchase was financed through Consolidated Water Co.'s existing credit lines with the Royal Bank of Canada. In addition, Consolidated has leased the land on which these facilities are located for an initial term of 25 years, and the Hyatt has entered into a 25-year "take or pay" water purchase agreement with Consolidated for the delivery of a minimum of 170,000 (US) gpd to supply the hotel and golf course. Consolidated will also supply water to the homes and condominiums in the Britannia Development, which is adjacent to the Hyatt Hotel and golf course facilities.
As previously announced, management expects the purchase of the Hyatt facilities to be accretive to earnings in 2002 and future years. For the year
ending Dec. 31, 2002, the company anticipates that the acquisition will positively impact earnings by at least seven cents per diluted share resulting from the supply of water to new customers, from the company's ability to better schedule water supplies from its, now, three production facilities and from its ability to defer other capital expenditure projects.