Pure Cycle Finalizes Acquisition Of Sky Ranch Note From Bank Of America
DENVER, Oct. 20, 2010 (GLOBE NEWSWIRE) -- Pure Cycle Corporation (Nasdaq:PCYO) announced it has closed on the acquisition of the promissory note payable by Sky Ranch LLC, and the deed of trust securing the Sky Ranch property. As announced on August 4, 2010, the Company acquired rights from Bank of America which will allow the Company to take ownership of the Sky Ranch property for cash payments totaling $7.0 million. The Company paid $700,000, which was placed in escrow, on July 28, 2010 and made the final payment of $6.3 million on October 18, 2010. The Company financed this acquisition and raised additional general working capital by selling approximately $5.5 million of common stock and by issuing a $5.2 million Convertible Negotiable Note Payable (the "Note"). The stock sale and issuance of the Note are described in detail in Form 8-K filings made with the SEC on September 29, 2010 and October 7, 2010.
The Company has begun the foreclosure process with the bankruptcy court to obtain direct ownership of the Sky Ranch property and the approximately 830 acre feet per year of decreed groundwater underlying the property. The Company anticipates the foreclosure process will take approximately 60 days to complete.
"Completing the financing and acquisition of Sky Ranch furthers the Company's provision of municipal water and wastewater services along the I-70 Corridor," stated Mark W. Harding, President and CEO of the Company. Mr. Harding further stated that "Acquiring the Sky Ranch property provides several advantages to our company including extracting the property from a complex out-of-state bankruptcy and positioning the property for developers and home builders to purchase low cost entry level lots. Denver's housing market continues to recover from its 2009 lows. Area developers and home builders have purchased and developed much of the excess lot inventories particularly those low cost entry level lots. Sky Ranch is a perfect addition to this market as the land is ideally positioned along Interstate 70, with no significant development barriers, low cost land, and direct access to water and sewer utilities from the Company. We look forward to working with national home builders and developers on the Sky Ranch property to provide low cost lots for entry level home buyers and to make these lots available immediately."
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