Work on AquaBounty's new salmon farm in Pioneer, Ohio, has been paused since June 2023 because of rising costs. The uncompleted facility is being used as collateral against a short-term $10m loan, as is the company's RAS farm in Indiana.

AquaBounty mortgages half-built Ohio farm for $10m loan

Editorial team
Published

United States land-based salmon farmer AquaBounty has taken out a short-term loan of up to $10 million to raise cash for working capital and buy up an existing debt.

It is using its recirculating aquaculture system (RAS) facility in Albany, Indiana, and yet-to-be-completed Ohio RAS facility as collateral.

According to a document filed with the US Securities and Exchange Commission, AquaBounty is borrowing the money at an interest rate of 15% from Los Angeles-based JMB Capital Partners Lenders, LLC. The loan is in two tranches, the first of $5m and the second of up to $5m, and matures on July 31, 2024 or, if earlier, upon the sale of certain collateral or upon an event of default.

First Farmers Bank

Approximately $2,843,000 of the initial loan will be used by AquaBounty to purchase a Loan and Security Agreement dated as of July 31, 2020, between the fish farmer and First Farmers Bank & Trust. AquaBounty’s Albany farm is mortgaged to First Farmers, which has agreed to assign the mortgage to JMB as part of the process.

In February, AquaBounty announced that it was putting its Albany farm up for sale to raise cash. The RAS facility has an annual capacity for 1,200 tonnes of AquaBounty’s AquAdvantage salmon, which inherit a 30-year-old genetic modification from their male parent which enables them to grow from hatch to harvest in just 18 months.

Work on the company’s 10,000-tonne RAS facility in Ohio was paused last year due to rising costs which had increased to between $485m and $495m.

Working capital

In a statement, AquaBounty board chair and chief executive Sylvia Wulf said: “As previously announced, AquaBounty has been exploring a wide range of financing alternatives to strengthen its balance sheet and increase its cash position. The cash from the (JMB) Loan agreement that was announced today, will be used to cover our immediate working capital requirements.

“With this financing in place, work will continue with Berenson and Company on the sale of the Indiana farm, in addition to, securing the additional financing that will allow us to resume construction of the farm in Ohio and for our long-term needs to pursue our growth strategy.”

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