8-K - CWCO - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

February 18, 2025

(Date of earliest event reported)

CONSOLIDATED WATER CO. LTD.

(Exact Name of Registrant as Specified in Charter)

Cayman Islands, B.W.I.	0-25248	98-0619652
(State or Other Jurisdiction of	(Commission File No.)	(IRS Employer Identification No.)
Incorporation)

Regatta Office Park

Windward Three, 4^th^ Floor

West Bay Road, P.O. Box 1114

Grand Cayman, KY1-1102

Cayman Islands

(Address of Principal Executive Offices)

(345) 945-4277

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.60 par value	CWCO	The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01	Entry into a Material Definitive Agreement

Previously Disclosed Background

Consolidated Water Co. Ltd. (the “Company”) sells water through its through its wholly-owned subsidiary, Cayman Water Company Limited (“Cayman Water”), under a license issued in July 1990 by the Cayman Islands government (the “1990 License”) that granted Cayman Water the exclusive right to provide potable water to customers within its licensed service area. Although the most recent express extension of the 1990 License expired on January 31, 2018, the Company has continued to supply water under the terms of the 1990 License, providing water services to the level and quality specified in the 1990 License and in accordance with its understanding of its legal obligations, treating those obligations set forth in the 1990 License as operative notwithstanding the expiration of the express extension. Under the 1990 License, Cayman Water has the exclusive right to produce potable water and distribute it by pipeline to its licensed service area, which consists of two of the three most populated areas of Grand Cayman Island: Seven Mile Beach and West Bay. The Company continues to pay the Cayman Islands government the royalty of 7.5% of the revenue that Cayman Water collects as required under the 1990 License.

In 2016, the Cayman Islands government passed legislation creating a new utilities regulation and competition office (“OfReg”), which is an independent and accountable regulatory body charged with protecting the rights of consumers, encouraging affordable utility services and promoting competition. Supplemental legislation passed in April 2017 transferred responsibility for the economic regulation of the water utility sector, and therefore the negotiations with the Company for a new retail license to, OfReg. Further legislation in 2018 changed the legal framework under which water production and supply concessions are granted by the Cayman Islands government and the legal framework under which the related utility licenses, which specify the operational provisions of such concessions, are issued by OfReg.

The Company began negotiations with OfReg in 2017 and such negotiations have been ongoing. During negotiations, both OfReg and its predecessor in the negotiations informed the Company that they seek to restructure the terms of the license in a manner that could significantly reduce the operating income and cash flows the Company has historically generated from the 1990 License. The Company is unable to determine what impact the resolution of the license negotiations will have on its consolidated financial condition or results of operations but such resolution could result in a material reduction (or the loss) of the operating income and cash flows the Company has historically generated from Cayman Water’s retail operations and could require the Company to record impairment losses to reduce the carrying values of its retail segment assets. Such impairment losses could have a material adverse impact on the Company’s consolidated financial condition and results of operations.

Current Disclosure

On February 18, 2025, the Cabinet of the Cayman Islands issued a new water production and supply concession to Cayman Water which granted Cayman Water the exclusive right to continue producing and supplying potable water within its service area in Grand Cayman, Cayman Islands, and pursuant to which the parties agreed to honor the terms of the 1990 License, including the royalty rate of 7.5% through the effective date of a new license to be granted to Cayman Water by OfReg (the “Grant of Concession”). The Grant of Concession may be terminated if Cayman Water fails to pay the royalty within 30 days of becoming due or otherwise breaches any terms of the Grant of Concession.

The description of the Grant of Concession presented above does not purport to be complete and is qualified in its entirety by reference to the Grant of Concession which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Forward Looking Statements

This Current Report on Form 8-K contains, or may be deemed to contain, “forward-looking statements” (as defined in the U.S. Private Securities Litigation Reform Act of 1995). These statements express the Company’s current expectation of future events or its future performance and do not relate directly to historical or current events. As such, the Company’s future actions and related results may vary from any expectations or goals expressed in, or implied by, the forward-looking 2

statements included in this Current Report, possibly to a material degree. The Company can offer no assurance that the assumptions made in preparing any of the forward-looking statements will prove accurate or that any long-term goals will be realized. All forward-looking statements included in this Current Report speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise publicly any such forward-looking statements, whether as a result of new information, future events, or otherwise. The Company can offer no assurance that a new license will be granted to Cayman Water by OfReg or if such license is granted that it will be on terms acceptable or favorable to Cayman Water.

Item 7.01	Regulation FD Disclosure.

On February 24, 2025, 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.

Item 9.01. Financial Statements and Exhibits.

(d)Exhibits.


Exhibit No.		Description
10.1		Grant of Concession dated February 18, 2025 Minister of Planning, Agriculture, Housing, Infrastructure, Transport & Development of the Cayman Islands in favor of Cayman Water Company Limited.
99.1		Press Release dated February 24, 2025.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

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.
<br><br>
	By:	/s/ David W. Sasnett
	Name:	David W. Sasnett
	Title:	Executive Vice President & Chief Financial Officer
Date: February 24, 2025

Exhibit 10.1

CAYMAN ISLANDS GOVERNMENT

GRANT OF CONCESSION

Production and Supply of Potable Water under the Water (Production and

Supply) Act (2018 Revision)

THIS GRANT OF CONCESSION is made this [18 ] day of [Feb] 2025

BY:	THE CABINET OF THE CAYMAN ISLANDS, of Government Administration Building, 31 Elgin Avenue, George Town, Grand Cayman, Cayman Islands (the “Cabinet”).
AND ISSUED TO:	CAYMAN WATER COMPANY LIMITED, a Cayman Islands company whose registered office is situated at Fourth Floor, Windward Three, Regatta Business Park, West Bay Road, PO Box 1114, George Town, Grand Cayman, KY1-1102, Cayman Islands (the “Concessionaire”).

WHEREAS:

A.	The Concessionaire is possessed of the Existing Licence (as defined below) which was valid and in force immediately prior to the coming into force on of the Water Sector Regulation Act 2017;
C.	The Water (Production and Supply) Act (2018 Revision) changes the legal framework under which Concessions are granted by Cabinet and the Water Sector Regulation Act changes the legal framework under which the related licences which make the operational provisions of such concessions, such licences being issued by the Utility Regulation & Competition Office
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D.	The Cabinet has determined to grant it a new concession under section 4 of the Water (Production and Supply) Act (2018 Revision), and hereby:
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GRANTS this Concession to

CAYMAN WATER COMPANY LIMITED under the terms and conditions provided hereunder

TERMS AND CONDITIONS:

1. DEFINITIONS

For the purposes of this Agreement:

(1)	“Best Endeavours” means taking all steps which a prudent, determined and

reasonable company, acting in its own interests and desiring to achieve that result, would take.

(2)	“the Concession” means the right granted by the Cabinet to the Concessionaire to solely and exclusively operate and execute the Concession within the Concession Area with effect from the Effective Date.
(3)	“the Concession Area” means those parts of these Islands more particularly described in Schedule One to this Agreement and outlined in red on the plans in that Schedule.
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(4)	“the Effective Date” means the date on which the Licence comes into effect;
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(5)	“the Existing Licence” means the licence granted by the Governor of the Cayman Islands to the Concessionaire on 11^th^July 1990 under section 3 of the Water (Production and Supply) Act 1979 granting the Concessionaire the exclusive right to process seawater to potable water for sale and to distribute and sell water by means of pipes within the Concession Area as extended by the parties and which (subject to clause 5.1 hereof) expired on 31^st^January, 2018.
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(6)	“the Licence” means the licence to be granted by the Office to the Concessionaire pursuant to Part III of the Water Sector Regulation Act (2019 Revision), and section 4(3) of the Water (Production and Supply) Act (2018 Revision).
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(7)	“the Office” means the Utility Regulation and Competition Office established under Section 4 of the Utility Regulation and Competition Act (2021 Revision).
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(8)	“Person” means any individual, firm, company or association or body of individuals, whether incorporated or not.
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(9)	“the Royalty” means 7.5% of the gross income the Concessionaire obtains from the sale of water in the Concession Area, payable quarterly in arrears to the Cayman Islands Government.
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(10)	Unless expressly defined in this Agreement, terms defined in the Water (Production and Supply) Act (2018 Revision) have the same meaning in this Agreement.
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(11)	A reference to a statute or statutory provision is a reference to it as amended or reenacted. A reference to a statute or statutory provision includes all subordinate legislation made under that statute or statutory provision.
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2. GRANT OF CONCESSION

2.1.	The Concessionaire will from the Effective Date and subject to the payment of the Royalty

and the terms and conditions of the Licence have for the Term the exclusive right to (i) produce water, and (ii) supply water in the Concession Area in the manner set out in the Licence, save and except that non-potable water may be self-supplied on the property on which it is produced by Persons other than the Concessionaire only in cases where the primary need for water on the property is for non-potable purposes.

2.2	The Concessionaire may not assign the grant of the Concession without obtaining the Cabinet’s prior written consent (such consent not to be unreasonably withheld or delayed).
2.3	The Concession shall be for a term coterminous with the Licence (“Term”), including any renewals thereof, save that the Cabinet may terminate the Concession with immediate effect if the Concessionaire:
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(i)	fails to pay the Royalty within 30 days of it becoming due;
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(ii)	breaches any terms hereof; or
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(iii)	the Licence is revoked by the Office and all avenues of appeal under the Water Sector Regulation Act (2019 Revision) against such revocation are exhausted or forfeited.
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3. **** CORPORATE STRUCTURE

3.1	The Concessionaire is incorporated in the Cayman Islands as a single purpose private company in accordance with the Companies Act (2022 Revision) with the sole purpose of undertaking the Concession.
3.2	The Concessionaire’s head office and main place of business shall for the term of the Concession be within the Island of Grand Cayman.
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4. **** SHAREHOLDING

4.1	The initial members constituting the Concessionaire and their respective shareholding are set out in Schedule Two hereto along with a chart of shareholdings, Corporate structure, and all ultimate beneficial owners for Anti-Money Laundering and Terrorist funding prevention compliance duties.
4.2	The Concessionaire shall not issue shares, and a Person owning or having an interest in shares in the Concessionaire shall not transfer, otherwise dispose of or deal in those shares or that interest where the issuance, transfer, disposal or dealing would thereby result in a total shareholding or total voting rights, by the Persons acquiring the shares or voting rights by the issuance, transfer, disposal or dealing, of more than ten percent of
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4.1

The initial members constituting the Concessionaire and their respective shareholding are set out in Schedule Two hereto along with a chart of shareholdings, Corporate structure, and all ultimate beneficial owners for Anti-Money Laundering and Terrorist funding prevention compliance duties.

4.2

The Concessionaire shall not issue shares, and a Person owning or having an interest in shares in the Concessionaire shall not transfer, otherwise dispose of or deal in those shares or that interest where the issuance, transfer, disposal or dealing would thereby result in a total shareholding or total voting rights, by the Persons acquiring the shares or

voting rights by the issuance, transfer, disposal or dealing, of more than ten percent of

---

the issued share capital or total voting rights of the Concessionaire, without the prior written consent of the Office.

5. CONCESSION TO BE GRANTED UPON SURRENDER OF EXISTING LICENCE

5.1	The Existing Licence is deemed to have been extended by agreement between the parties until the Effective Date.
5.2	The Concessionaire waives any and all rights it may have prior to the date of this Grant of Concession to increase charges to its customers, save that any increases made since the expiry of the Existing Licence and prior to the date of this Grant of Concession shall remain in effect.
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5.3	On the Effective Date the Existing Licence shall expire and terminate, and the Concession and the Licence issued by the Office shall become effective.
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6. EXEMPTION FROM OTHER LICENCES

The Concessionaire is deemed to be the holder of a franchise for the purpose of section 4(1)(d) of the Local Companies (Control) Act (2025 Revision), and is exempt from obtaining a trade and business licence under the Trade and Business Licensing Act (2021 Revision).

7. NO EXCHANGE CONTROL

Subject to clauses 2, 3 and 4 above, the Concessionaire shall not be subject to any indirect or direct exchange controls or other restrictions or controls relating to the transfer to others (whether overseas or otherwise) of the Concessionaire’s shareholdings, investments and profits.

8. EMPLOYMENT OF STAFF

The Company shall use its Best Endeavours to employ Caymanians [as defined in the Immigration (Transition) Act (2022 Revision)] in various categories of employment in its operations.

9. BUYER OF LAST RESORT

Where the provisions of Section 8(8) to 8(11) of the Water Sector Regulation Act (2019 Revision) apply and the parties are unable by using reasonable efforts to find a buyer for the

assets to be compulsorily divested by the Concessionaire at the average valuation of the valuation panel [as described in subsection (9) of the said Section], then the Government of the Cayman Islands shall purchase those assets at that average valuation.

10. NOTICES

Notices may be given hereunder by either party to the other party by registered mail, hand delivery or courier and addressed as set out below, and shall be deemed to have been received in the case of registered mail three days after being receipted at a Post Office, in the case of courier on the business day in the Cayman Islands after dispatch and in the case of hand delivery when delivered, or if the day of delivery is not a business day in the Cayman Islands or the time of delivery is after 5pm on a business day, on the next following business day.

The Cabinet

Ministry of Planning, Agriculture, Housing & Infrastructure

The Chief Officer

Government Administration Building

George Town, Grand Cayman

Tel: (345)-949-7900

The Concessionaire

Cayman Water Company Limited

Fourth Floor, Windward Three, Regatta Business Park,

West Bay Road, PO Box 1114

George Town, Grand Cayman, KYI-1102

Cayman Islands

Tel: (345)-945-4277

11. APPLICABLE LAW AND FORUM

This Grant of Concession and any licences, or other instruments to be issued made or promulgated in accordance with this Grant of Concession shall be governed, construed, performed and enforced in accordance with the laws of the Cayman Islands.

SCHEDULE ONE

Concession Area

IN WITNESS WHEREOF this Agreement has been entered into the date first written above.

EXECUTED as a Deed for and on behalf of		)
the Cabinet of the Cayman Islands:		)
		)
		)
/s/ Miguel Jacques		)	By:	/s/ Johany S. Ebanks
Witness		)	Name:	Johany S. Ebanks
Name:	Miguel Jacques	)
Address:		)	Office: Minister of Planning, Agriculture,
		)	Housing, Infrastructure, Transport &
Occupation:	Sr. Policy Advisor	)	Development
		)

EXECUTED as a Deed by Cayman Water		)
Company Limited in the presence of:		)
		)
		)
/s/ Raymond Whittaker		)	By:	/s/ Frederick McTaggart
Witness		)	Name:	Frederick McTaggart
Name:	Raymond Whittaker	)
Address:		)	Office:	President and Director
	Grand Cayman	)
Occupation:	Businessman	)
		)

SCHEDULE TWO

Concessionaire’s Shareholding

			<br><br>
NAME	ADDRESS	CERTIFICATE NO.	ISSUED<br><br>SHARES
Consolidated Water Co. Ltd.	P.O. Box 1114<br><br>George Town<br><br>Grand Cayman KY1-1102	1	3

‌Exhibit 99.1

Consolidated Water’s Cayman Islands Water Utility Receives New Water Production and Supply Concession from Cayman Islands Government

GEORGE TOWN, Grand Cayman, Cayman Islands, February 24, 2025 -- Consolidated Water Co. Ltd. (NASDAQ Global Select Market: CWCO), a leading designer, builder and operator of advanced water supply and treatment plants, reported that its wholly owned subsidiary, Cayman Water Company, has received its new concession from the Cayman Islands government that grants it the continued exclusive rights to produce and supply potable water within its existing service area on Grand Cayman, the largest island of the Cayman Islands.

Cayman Water Company operates three sea water reverse osmosis desalination plants on Grand Cayman that produce approximately 4 million gallons per day of potable water for the island’s residences and businesses. The company recently reported increased retail water sales due to the continued business and population growth on the island.

In 2018, the Cayman Islands enacted changes to its regulatory framework governing water utilities. This new framework requires Cayman Water to first be granted a concession before obtaining or renewing the associated operating license. Cayman Water will next commence negotiations with the Cayman Islands utility regulator, OfReg, to secure the license. The new license is expected to involve a restructuring of the previous operating terms and conditions.

“Given the regulatory changes, the grant of the concession was a critical step towards completing the negotiations for the new operating license,” noted Consolidated Water’s president and CEO, Rick McTaggart. “We were fortunate to have OfReg representatives present during the signing of the grant of concession, which indicates to us that our negotiations for the new license should commence shortly. We look forward to working closely with OfReg in providing clean, safe potable water for the communities which we have had the privilege to serve since 1973.”

Cayman Water’s existing operating license that it received in 1990 will remain in force until the new license is issued by OfReg.

About Consolidated Water Co. Ltd.

Consolidated Water Co. Ltd. develops and operates advanced water supply and treatment plants and water distribution systems. The company designs, constructs and operates seawater desalination facilities in the Cayman Islands, The Bahamas and the British Virgin Islands, and designs, constructs and operates water treatment and reuse facilities in the United States. The company recently entered the U.S. desalination market with a contract to design, construct, operate and maintain a seawater desalination plant in Hawaii.

The company also manufactures and services a wide range of products and provides design, engineering, management, operating and other services applicable to commercial and municipal water production, supply and treatment, and industrial water and wastewater treatment.

Cautionary Note Regarding Forward-Looking Statements

This press release contains, or may be deemed to contain, “forward-looking statements” (as defined in the U.S. Private Securities Litigation Reform Act of 1995). These statements express the Company’s current expectation of future events or its future performance and do not relate directly to historical or current events. As such, the Company’s future actions and related results may vary from any expectations or goals expressed in, or implied by, the forward-looking statements included in this press release, possibly to a material degree. The Company can offer no assurance that the assumptions made in preparing any of the forward-looking statements will prove accurate or that any long-term goals will be realized. All forward-looking statements included in this press release speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise publicly any such forward-looking statements, whether as a result of new information, future events, or otherwise. The Company can offer no assurance that a new license will be granted to Cayman Water by OfReg or if such license is granted that it will be on terms acceptable or favorable to Cayman Water.

For more information, visit cwco.com.

Company Contact: David W. Sasnett Executive Vice President and CFO Tel (954) 509-8200 Email Contact

Investor & Media Contact: Ron Both or Grant Stude CMA Investor & Media Relations Tel (949) 432-7566 Email Contact