AeroFarms has emerged from bankruptcy proceedings with a new CEO appointed to the US-based vertical-farming business.
The New Jersey-headquartered company said it has exited the Chapter 11 process entered in June and has approval from the bankruptcy court in Delaware for an “asset purchase agreement” with existing investors Grosvenor Food & AgTech and Doha Venture Capital.
Molly Montgomery, a partner at agri-food investor Grosvenor Food & AgTech, which focuses on the US and UK markets, becomes acting CEO and executive chair of AeroFarms’ board of directors.
David Rosenburg, who founded AeroFarms in 2004 with business partner Edward Harwood, stepped down as CEO in June to take up the role of advisor to the company’s board. Meanwhile, finance chief Guy Blanchard also took on the additional position of president.
Montgomery most recently served as CEO of Denver-based Custom Made Meals, a supplier of entrees and appetisers to the retail channel. Previously, she headed up Landec Corp., the owner of fresh vegetables and salads group Curation Foods.
AeroFarms cultivates leafy greens in a controlled-indoor environment and supplies Whole Foods Market stores and select outlets of Ahold Delhaize, HEB and Harris Teeter. The business operates two vertical farms in Newark, New Jersey, and Danville, Virginia, which is still at the scaling-up stage.
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“This restructuring substantially strengthens AeroFarms’ balance sheet, injecting the necessary funds to reach profitability at the flagship operation in Danville, Virginia,” the company said in a statement.
“The company has eliminated spending on all projects that do not contribute to the ramp-up of the Danville Farm, thereby accelerating its path to profitability.”
AeroFarms added the Danville facility should be fully up to speed by the end of the year and “soon thereafter” will reach “profitability”.
Announcing the Chapter 11 proceedings in June, AeroFarms said it had “recently faced significant industry and capital market headwinds”.
Industry peer AppHarvest then followed AeroFarms into Chapter 11 proceedings in July. Loss-making Kentucky-headquartered AppHarvest said at the time it was “pursuing a financial and operational transition to enable the company to reduce its outstanding liabilities”.
Other vertical-farming businesses have also faced financial hardship. Eider in the UK, Upward Farms in New York, Netherlands-based Future Crops and France’s Agricool have all gone to the wall.
Infarm in Germany, meanwhile, announced an expanded downsizing exercise in May with a decision to quit its home markets in Europe to focus on North America.
Just Food has asked AeroFarms for more details on the asset purchase programme and whether it has given up more shares in the business to Grosvenor Food & AgTech and Doha Venture Capital.
Stephan Dolezalek, a managing partner at Grosvenor Food & AgTech, said: “This marks a new chapter in the maturity and growth of AeroFarms. We have now put in place changes needed to deliver on their vision.
“As an investor dedicated to creating a more sustainable global food supply chain, we see vertical farms as a critical part of the solution and are now focused on efficiently scaling our operations to deliver a market-leading product through a profitable business model.”