Posted on 03/12/2002 10:00:39 AM PST by spald
--> Babbitt Will Head New Cadiz Unit
Seeking Opportunities in Mideast
SANTA MONICA, Calif. -- Former Interior Secretary Bruce Babbitt has joined water-development firm Cadiz Inc. and will head a new subsidiary aimed at finding business opportunities in the Middle East.
Mr. Babbitt, the former Arizona governor who ran the Interior Department during the Clinton administration, gives Cadiz -- a company known for its high-profile political connections -- a big name to draw upon as it seeks to manage water resources in one of the most arid parts of the world.
"I would think you would open some pretty big doors" by having Mr. Babbitt on the team, said Debra Coy, an analyst who tracks Cadiz for Schwab Capital Markets.
The 63-year-old Mr. Babbitt has been with the Washington office of the law firm Latham & Watkins. He will continue to be "of counsel" there and live in Washington, but will spend about half his time on Cadiz matters.
Mr. Babbitt noted that, in terms of its need for irrigation, the Middle East is "very similar to parts of California," where Cadiz has been one of a handful of corporate pioneers in a fledgling water-transfer market.
The company has signed a 50-year agreement with the Metropolitan Water District of Southern California to store large amounts of water in an underground aquifer that runs beneath land that it owns in the Mojave Desert.
The water would then be pumped out and shipped to the MWD for use in thirsty urban areas during dry years. The deal, which is opposed by various environmental groups, is still awaiting final approvals from the Bureau of Land Management and the MWD.
Cadiz, in announcing Mr. Babbitt's appointment, trumpeted his strong environmental credentials. However, since leaving the government, he has been criticized by environmentalists for lobbying on behalf of Seattle-based lender Washington Mutual Inc., which is trying to build a new town of more than 3,000 homes at Ahmanson Ranch north of Los Angeles.
Cadiz is no stranger to the Middle East. In 1999, it was hired by Kingdom Agricultural Development Co., which is controlled by Prince Alwaleed bin Talal of Saudi Arabia, to manage an agricultural and water project in southern Egypt. In January, Cadiz struck a deal to merge its Sun World agricultural operation with Kingdom Agricultural.
Under terms of the transaction, which still isn't complete, the prince's company is set to acquire a 49.75% stake in Sun World for $85 million and other assets, including 100,000 acres of land and associated water resources in Egypt. The cash infusion, Ms. Coy said, would go a long way toward improving Cadiz's balance sheet.
Ms. Coy cautioned that, even with Mr. Babbitt's clout, water projects tend to be notoriously slow to come together, no matter where they are. For instance, the MWD deal -- potentially valued at hundreds of millions of dollars during its life -- has been in the works for five years.
As of 4 p.m. Monday in Nasdaq Stock Market trading, Cadiz shares rose nine cents to $8.50; its 52-week high is $10.50.
Write to Rick Wartzman at rick.wartzman@wsj.com1
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.