By Andi Anderson
AquaBounty, a United States-based land-based salmon farmer, has secured a short-term loan of up to $10 million to address immediate working capital requirements and buy back existing debt. The company is utilizing its recirculating aquaculture system (RAS) facility in Albany, Indiana, and a partially built RAS facility in Ohio as collateral for the loan.
The loan, obtained from Los Angeles-based JMB Capital Partners Lenders, LLC, carries an interest rate of 15% and is structured in two tranches, with the first tranche of $5 million and the second tranche of up to $5 million. The loan matures on July 31, 2024, or earlier upon the sale of certain collateral or in the event of default.
Approximately $2.843 million of the initial loan will be used to purchase a Loan and Security Agreement dated July 31, 2020, between AquaBounty and First Farmers Bank & Trust. AquaBounty's Albany farm is currently mortgaged to First Farmers, and the bank has agreed to assign the mortgage to JMB as part of the loan process.
This move comes after AquaBounty announced plans to sell its Albany farm in February to generate cash. The facility has an annual capacity for 1,200 tonnes of AquAdvantage salmon, a genetically modified species capable of rapid growth.
Work on AquaBounty's 10,000-tonne RAS facility in Ohio was halted last year due to rising costs, estimated between $485 million and $495 million.
Sylvia Wulf, AquaBounty's board chair and chief executive, stated, "The cash from the JMB loan agreement will cover our immediate working capital requirements." She added that the financing would enable the company to continue efforts to sell the Indiana farm and secure additional funding to resume construction of the Ohio facility and pursue long-term growth strategies.
Photo Credit: pexels-karolina-grabowska
Categories: Ohio, Business