AppHarvest, a US-based agtech company, has filed for Chapter 11 bankruptcy protection as part of a financial and operational transition to address its outstanding liabilities. The company made voluntary petitions for protection under Chapter 11 in the US Bankruptcy Court for the Southern District of Texas.
To support its operations during this period, AppHarvest secured approximately $30 million in debtor-in-possession (DIP) financing from its largest secured creditor, Equilibrium.
This financing will ensure the necessary liquidity to sustain operations at its farms in Kentucky, including AppHarvest Morehead, AppHarvest Richmond, and AppHarvest Somerset.
Despite the bankruptcy filing, AppHarvest’s business operations will continue as usual at its farms, with products being shipped to top national grocery store chains, restaurants, and foodservice outlets. Additionally, AppHarvest is looking to transition its farm in Berea back to its distribution partner, Mastronardi Produce, or one of its affiliates, for around $3.75 million. Mastronardi already owns the Berea farm, and they previously informed AppHarvest that the lease would be terminated.
AppHarvest’s CEO, Tony Martin, reassured stakeholders that the Chapter 11 filing was a strategic move to maximize value for all parties involved. The company’s strategic plan, known as Project New Leaf, has shown promising progress toward operational efficiencies, leading to higher sales, cost savings, and improved product quality.
The Chapter 11 protection will allow AppHarvest to restructure and focus on its transition plan during this challenging period.
