AppHarvest Shares Drop 42% After Files for Chapter 11 Bankruptcy

Dow Jones2023-07-24

By Chris Wack

AppHarvest shares were down 42% to 19 cents in premarket trading after the company said it is pursuing a financial and operational transition, using chapter 11 bankruptcy, that would allow the company to reduce its outstanding liabilities.

The sustainable food company said business operations will continue at its farms, including shipping product to grocery store chains, restaurants and food service outlets.

To pursue its transition, AppHarvest has 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 has obtained a commitment from Equilibrium, its largest secured creditor, to provide $30 million of debtor-in-possession financing to provide the necessary liquidity to support operations at the AppHarvest Morehead, AppHarvest Richmond and AppHarvest Somerset farms during the Chapter 11 process. The DIP financing is subject to approval of the court.

AppHarvest is pursuing a transition of its AppHarvest Berea operations to its distribution partner, Mastronardi Produce, or one of its affiliates, in exchange for $3.75 million, additional incremental funding and support for the company's restructuring plan.

Write to Chris Wack at chris.wack@wsj.com

(END) Dow Jones Newswires

July 24, 2023 06:17 ET (10:17 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.

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