Creditor seeks immediate $47.2M repayment on AppHarvest’s largest farm

The Kentucky-based greenhouse grower is facing threats of another foreclosure, this time at the largest in its four-farm network in Morehead, Ky.
The Kentucky-based greenhouse grower is facing threats of another foreclosure, this time at the largest in its four-farm network in Morehead, Ky.
(Photo courtesy AppHarvest)

A domino effect of cascading credit issues and financial concerns have been trailing controlled environment agriculture grower, AppHarvest, in recent weeks. The latest financial challenge facing the indoor grower is at the company’s oldest and most productive farm facility in Moreland, Ky.

According to a recent SEC filing, Rabo AgriFinance has demanded repayment from AppHarvest on its $47.2 million loan tied to the company's Moreland farm facility, claiming AppHarvest defaulted on its credit agreement on July 3. If the two companies cannot come to an agreement, AppHarvest faces foreclosure on the largest farm in its four-farm network.

The recent demand for immediate repayment from Rabo AgriFinance is no surprise, as terms that funded the construction of AppHarvest’s Morehead tomato farm included a cross-default provision in the loan agreement.

Related news: AppHarvest ousts CEO as creditors continue to knock

According to previous public filings, Rabo’s cross-default loan provision allows the lender to request full payment of its loan and begin foreclosure proceedings if AppHarvest were to default on any of its other loans. 

The conditions of this cross-default loan provision appear to be unfolding now, as the recent threat of foreclosure for the Moreland farm facility comes on the heels of a recent lease dispute with Mastronardi Produce, creditor and landlord for another AppHarvest farm located in Berea, Ky., and a recent loan default notice from Equilibrium at its farm in Richmond, Ky. 

Related news: AppHarvest faces foreclosure of its Richmond tomato farm

In the most recent dispute, Mastronardi Produce disclosed that it planned to terminate AppHarvest’s lease on the property, alleging in a July 11 public filing, that “minimum production volumes” had been violated and reason enough for AppHarvest to vacate the facility.

Triaging mounting financial concerns

The indoor grower has a plan to surmount recent challenges, according to a news release. As part of the plan, AppHarvest recently appointed CEA and produce industry veteran Tony Martin to the position of CEO. Martin reportedly has a strategy for refocusing the company in the years ahead, which he calls "Project New Leaf."

Project New Leaf's objective is to focus AppHarvest's workforce on improving labor efficiency, implementing disciplined close controls, leveraging industry relationships and improving feedback across the organization over the next five years, the release said. 

 

 

Latest News

Cool Creations previews new products at AWG show
Cool Creations previews new products at AWG show

North Kansas City, Mo.-based Cool Creations LLC had two new products to show off at the Associated Wholesale Grocers' seventh annual Innovation Showcase, March 25-26.

Dole, Fresh Express nix sale of fresh vegetables division
Dole, Fresh Express nix sale of fresh vegetables division

Following Department of Justice concerns about competition in the packaged salad market, the companies have abandoned the proposed $308 million deal.

Fresh Del Monte named to most trusted companies list
Fresh Del Monte named to most trusted companies list

Fresh Del Monte is among the honorees on the Most Trustworthy Companies in America 2024 list, recognized for a commitment to quality, sustainability and innovation in fresh produce.

Improved conditions for West Mexico produce may arrive with spring
Improved conditions for West Mexico produce may arrive with spring

West Mexico growers faced a tough fall/winter season, but distributors believe things are looking up for spring with increased supplies and more reasonable prices.

What’s next for retail foodservice: Retailers dish up insights in free webinar
What’s next for retail foodservice: Retailers dish up insights in free webinar

"Impact Retail Foodservice 2024" will gather industry experts to discuss opportunities and challenges, as well as share insights for driving growth in the year ahead in one of the hottest departments in grocery.

Natural Delights names new CEO
Natural Delights names new CEO

With CEO Tim Rooney is stepping down to pursue another opportunity, Natural Delights is promoting its chief operating officer, effective April 1.