BY Fraser Tennant
In what it describes as a “financial and operational transition”, sustainable food company AppHarvest, Inc. has filed for Chapter 11 bankruptcy protection in a bid to it to reduce its outstanding liabilities.
The company has also obtained a commitment from Equilibrium – its largest secured creditor – to provide approximately $30m of debtor-in-possession (DIP) financing to provide the necessary liquidity to support operations during the Chapter 11 process. The DIP financing is subject to approval by the bankruptcy court.
AppHarvest currently has four facilities in Kentucky – a 60-acre flagship tomato farm in Morehead, a 15-acre salad green farm in Berea, a tomato farm in Richmond and a 30-acre farm in Somerset – that grow tomatoes, leafy greens, cucumbers and strawberries.
Business operations will continue at the farms throughout the Chapter 11 process, including shipping product to top national grocery store chains, restaurants and food service outlets.
“The AppHarvest board of directors and executive leadership evaluated several strategic alternatives to maximise value for all stakeholders prior to the Chapter 11 filing,” said Tony Martin, chief executive of AppHarvest. “The filing provides protection while we work to transition operation of our strategic plan, Project New Leaf, which has shown strong progress toward operational efficiencies resulting in higher sales, cost savings and product quality.”
Developing and operating some of the world’s largest high-tech indoor farms with high levels of automation, AppHarvest’s farms are designed to grow produce using sunshine, rainwater and up to 90 percent less water than open-field growing, all while producing yields up to 30 times that of traditional agriculture and preventing pollution from agricultural runoff.
The company went public via a special purpose acquisition company (SPAC) in early 2021 and planned to operate 12 indoor farming facilities by 2025.
AppHarvest’s Chapter 11 filing comes just weeks after fellow indoor agri-tech business AeroFarms filed its own Chapter 11 petition.
News: AppHarvest files for Chapter 11 bankruptcy, aiming for financial and operational transition