Richmond AppHarvest faces foreclosure
Jun. 6—RICHMOND — AppHarvest faces a foreclosure action against its 60-acre farm in Richmond. AppHarvest risks losing one of its largest greenhouse facilities to foreclosure if it doesn't reach a resolution with a creditor demanding over $66 million, a court filing in Madison Circuit Court said.
The creditor, CEFF II AppHarvest Holdings, demanded immediate repayment of what remains of the loan plus interest — about $66.7 million — or the Richmond farm would be taken as collateral. CEFF II AppHarvest Holdings is an affiliate of Equilibrium Sustainable Foods. The creditor filed a foreclosure complaint on the facility in Madison Circuit Court on May 30. AppHarvest has 20 days to respond in court or face a default judgment.
Equilibrium alleges that AppHarvest breached its obligations to the lender by failing to complete the Richmond facility on time and on budget, among other allegations. The lender also cited a mechanics lien filed by the general construction contractor on the Richmond greenhouse, Dalsem Greenhouse Technology B.V., to secure $14.5 million the contractor claims it's owed.
"We believe that we are in full compliance with the loan terms," said Travis Parman, AppHarvest's chief communications officer, in a statement. "We are working to resolve the issue directly with Equilibrium, which we believe is based on their misunderstanding of the facts."
A default on the loan for the Richmond facility could lead to the commencement of foreclosure proceedings on the company's other 60-acre tomato growing facility in Morehead — the company's oldest and most productive facility. The alleged default and foreclosure proceedings on the Richmond facility come less than a year after AppHarvest said in public filings that it was running low on cash and disclosed "substantial doubt" about its future.
Once valued at $3.7 billion following its 2021 initial public offering, AppHarvest's sales have fallen below projections amid construction delays and operational challenges. After selling its Berea greenhouse and leasing it back to generate cash late last year and issuing $43 million in new shares in February, the company needs to raise additional capital in the next four months to remain in business.
AppHarvest envisions itself as part of a "reliable, climate-resilient food system," saying its greenhouses are designed to achieve much higher produce yields than traditional open-field farming while using less water and preventing pollution from agricultural runoff.
AppHarvest is operating some of the world's largest high-tech indoor farms with robotics and artificial intelligence to build a reliable, climate-resilient food system. AppHarvest's farms are designed to grow produce using sunshine, rainwater and up to 90% less water than open-field growing, all while producing yields up to 30 times that of traditional agriculture and preventing pollution from agricultural runoff.
AppHarvest currently operates its 60-acre flagship farm in Morehead, Ky., producing tomatoes, a 15-acre indoor farm for salad greens in Berea, Ky., a 30-acre farm for strawberries and cucumbers in Somerset, Ky., and a 60-acre farm in Richmond, Ky., for tomatoes. The four-farm network consists of 165 acres under glass. It employs about 1,000 people across its four greenhouses, a company official sstated last month.
WDRB.com and the Lexington Herald-Leader contributed to this story.
