AppHarvest, a sustainable food company and public benefit corporation, will pursue a financial and operational transition to reduce outstanding liabilities. To pursue this transition, AppHavest filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. The company also obtained a commitment from Equilibrium, the company’s largest secured creditor, to provide approximately $30 million of debtor-in-possession financing to provide the necessary liquidity to support operations at several of its farms during the Chapter 11 process. The DIP financing is subject to approval of the court.
AppHarvest is also pursuing a transition of its AppHarvest Berea operations to AppHarvest’s distribution partner, Mastronardi Produce, or one of its affiliates, in exchange for approximately $3.75 million, additional incremental funding and support for the company’s restructuring plan. This transition is subject to approval of the court.
“The AppHarvest board of directors and executive leadership evaluated several strategic alternatives to maximize value for all stakeholders prior to the Chapter 11 filing,” Tony Martin, CEO of AppHarvest, said. “The Chapter 11 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.”
Sidley Austin and Jackson Walker are representing AppHarvest as counsel, while Jefferies is serving as investment banker and Portage Point Partners is serving as financial adviser.
