RE:RE:RE:RE:Should move higherGWR Global Water Resources Corp. announces court approval of arrangement and pricing of U.S. IPO 04/28/2016 07:00 AM ET PHOENIX, AZ, Apr 28, 2016 (Canada NewsWire via COMTEX News Network) -- /THIS PRESS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./
GWR Global Water Resources Corp. (TSX: GWR) (the "Company") announced today that it has obtained a final court order approving the previously announced arrangement of the Company (the "Arrangement") under the Business Corporations Act (British Columbia). The Arrangement was approved by shareholders of the Company at an annual and special meeting held on April 25, 2016. At the effective time of the Arrangement, the Company will merge with and into Global Water Resources, Inc. ("GWRI") and, as a result, the Company will cease to exist as a British Columbia corporation and GWRI, governed under the laws of the State of Delaware, will be the surviving entity of the merger.
GWRI also announced today that it has priced its initial public offering of 1,164,800 shares of common stock at U.S.$6.25 per share for gross proceeds of U.S$7,280,000 (the "U.S. IPO"). In addition, GWRI has granted the underwriter of the U.S. IPO a 30-day over-allotment option to purchase up to an additional 174,720 shares of common stock on the same terms and conditions. GWRI intends to use the net proceeds from the U.S. IPO for working capital and other general corporate purposes.
The Arrangement and the U.S. IPO are cross-conditional and will only be completed concurrently. Subject to the satisfaction of customary conditions, the Arrangement and the U.S. IPO are expected to close on May 3, 2016. On completion of the Arrangement and the U.S. IPO, all of the shares of common stock of GWRI will be listed on the Toronto Stock Exchange under the trading symbol "GWR" and on the NASDAQ Global Market under the trading symbol "GWRS", subject to the satisfaction of applicable listing requirements.
As described in the Company's meeting circular that was sent to shareholders of the Company in connection with the Arrangement, the merger of the Company with and into GWRI may give rise to Canadian and U.S. tax liabilities to the Company and therefore to GWRI. The amount of the potential tax that may be payable by GWRI as a consequence of the merger will depend on a number of factors that cannot be predicted with certainty at this time, including in particular the fair market value of the shares of common stock of GWRI held by the Company at the time of the consummation of the merger scheduled for May 3, 2016. Using the trading price of the shares of common stock of GWRI as a rough approximation for the fair market value of the shares of common stock of GWRI, the Company estimates that a trading price at the time of the closing of the merger of US$6.00 per GWRI share would result in aggregate U.S. and Canadian tax liabilities to GWRI of approximately US$160,000, a trading price at the time of the closing of the merger of US$6.50 per GWRI share would result in aggregate U.S. and Canadian tax liabilities to GWRI of approximately US$1,900,000, a trading price of US$7.00 per GWRI share would result in aggregate U.S. and Canadian tax liabilities to GWRI of approximately US$3,500,000, and a trading price of US$7.50 per GWRI share would result in aggregate U.S. and Canadian tax liabilities to the Company of approximately US$5,800,000. The Company does not believe that tax liabilities at the levels described above would result in a material adverse effect to GWRI.