These are difficult times for vertical farming companies but the people at Aerofarms are working hard to get the business back on its feet following its Chapter 11 Bankruptcy filing in June. With fresh plans to sell company assets to a newly formed investment entity – ‘AF NewCo Inc’, the business also continues to increase shipments of microgreens from its indoor vertical farm in Danville, Virginia.
Asset Purchase Agreement
On Monday, July 10th 2023, Aerofarms signed an Asset Purchase Agreement (APA) with AF NewCo, Inc., a newly formed entity owned by a group of existing Aerofarms investors including Grosvenor Food & AgTech, INGKA Investments Ventures US BV, Cibus Fund, ACEG Beteiligungsgesellschaft mbH. The APA calls for AF NewCo to act as Stalking Horse Bidder to acquire Aerofarms assets.
The following day, at the US Bankruptcy Court in Delaware, AeroFarms filed a supplement to a previously filed motion, to Approve Bid Procedures for Court approval to enter into an Asset Purchase Agreement (“APA”) and designate a Stalking Horse bidder.
Aerofarms is seeking to conduct an auction to sell company assets under Section 363 of the Bankruptcy Code, while it continues ordinary operations of the business. Subject to the Court’s calendar, Aerofarms is seeking entry of an order from the Bankruptcy Court confirming the results of the 363 Sale on or before August 22, 2023.
AF NewCo has provided a Debtor-In-Possession (“DIP”) loan of US$10 million, and under the terms of the APA will be credit bidding its DIP, assuming substantial operating liabilities and funding the wind-down of the Chapter 11 proceedings.
Aerofarms received Court approval to continue paying employees, vendors and other entities in the ordinary course of business and will utilise the funding provided by the DIP loan to do so.
Product availability continues to expand from Danville
AeroFarms’ strategic focus remains on its commercial indoor vertical farm in Danville, Virginia that continues to scale and meet increased demand for its award-winning microgreens. The farm is capable of growing over 3 million pounds of leafy greens annually.
The firm has recently announced the expanded retail availability of its award-winning microgreens at both Walmart and Stop & Shop across the Mid-Atlantic and Northeast, respectively.
This expansion follows the national expansion with Amazon Fresh online and at all Amazon Fresh grocery store locations, building on AeroFarms successful national launch with Whole Foods Market in 2022, which marked an industry-first for an indoor leafy greens grower to be part of Whole Foods Market Global Planogram.
“We are excited by the growing customer demand for our market leading microgreens and to be expanding our retail presence and look forward to emerging stronger and better positioned to prosper into the future,” said Guy Blanchard, President of AeroFarms. “We will continue to work in close cooperation with all of our stakeholders to conduct our financial and operational restructuring, which will position us for long-term success.”