AeroFarms Is Pursuing Sale of Business

Vertical-farming company files for Chapter 11 bankruptcy

7/13/2023

AeroFarms will continue to work with stakeholders to conduct financial and operational restructuring to position the company for long-term success.

An almost 20-year-old indoor farming company is undergoing financial and operational restructuring. On July 11, AeroFarms, Inc. filed with the United States Bankruptcy Court in Delaware Case No. 23-10737, 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. The company wants to conduct an auction to sell company assets under Section 363 of the Bankruptcy Code while it continues ordinary operations of the business.

AeroFarms signed an APA with AF NewCo, Inc., a newly formed entity owned by a group of existing investors including Grosvenor Food & AgTech, INGKA Investments Ventures US BV, Cibus Fund and ACEG Beteiligungsgesellschaft mbH. The APA calls for AF NewCo to act as Stalking Horse Bidder to acquire company assets.

The bidding procedures and timeline for the auction, which are subject to approval by the Bankruptcy Court, are aimed to promptly sell company’s assets to provide better clarity on AeroFarms’ future. The company is seeking entry of an order from the Bankruptcy Court confirming the results of the 363 Sale on or before Aug. 22.

AF NewCo also provided a Debtor-In-Possession (DIP) loan of $10 million, and under the terms of the APA will be credit bidding its DIP.

AeroFarms recently received approval to continue paying employees, vendors and other entities in the ordinary course of business, utilizing the funding provided by the DIP loan to do so.

While the company and its advisors work with stakeholders and other interested parties towards the successful resolution of its Chapter 11 case, AeroFarms’ strategic focus remains on its commercial indoor vertical farm in Danville, Va., which continues to scale and meet increased demand for its microgreens.

The company recently announced the expanded retail availability of its 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.

“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 Newark, N.J.-based 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.”

The company will continue to provide regular updates of its strategic plan and Chapter 11 filing as information becomes available.

Since 2004, AeroFarms has been championing transformational innovation for agriculture. The Certified B Corporation says its patented indoor vertical farming technology provides the optimal conditions for healthy plants to thrive, taking agriculture to a new level of precision, food safety, and productivity while using up to 95% less water and no pesticides versus traditional field farming. Its products can be found at major retail selling partners like Ahold Delhaize, Amazon Fresh, Baldor Specialty Food, Compass Group, Harris Teeter, H-E-B, ShopRite, The Fresh Market, Walmart and Whole Foods Market.