Shares of Kalera Public Limited Company (Nasdaq: KAL) have experienced significant growth in pre-market trading, with a 42.37% increase and a trading value of $9.61. The thriving performance of the vertical farming company can be attributed to the successful execution of its transformation strategy.
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What plans does KAL have for transforming?
Last week, Kalera (KAL) announced a major milestone in its business strategy with the successful acquisition of its international operations by Dutch indoor farming company, Growy Holdings BV. The sale, which was completed under court supervision in Germany, included Kalera GmbH’s German headquarters, a Kuwait farm, and a farm currently under construction in Singapore.
This reorganization represents a crucial step for KAL as it positions itself as a leader in the rapidly growing vertical farming industry. By divesting its international operations, KAL can now fully focus its efforts and resources on becoming a dominant player in consumer segments that offer attractive growth opportunities, particularly in the production of its high-quality loose-leaf and whole-head products.”
Kalera has a rapidly growing proprietary brand that is gaining popularity among retail and food service customers in all the states where it operates. This transaction enables the company to concentrate its efforts on its core markets, resulting in increased value for all stakeholders, including customers, shareholders, affiliated companies, and others.
As a result of the separation of its international assets, Kalera is now well-positioned to focus on expanding its presence as a leading player in the vertical farming industry in the United States. The company can now invest in its existing farms and target customer segments that offer strong growth potential. These initiatives will optimize the utilization of Kalera’s Houston and Denver farms, ensuring consistent quality and quantity of its products for customers, driving profitable growth, and delivering long-term value to shareholders.
How will KAL execute the transformation?
Kalera (KAL) has taken the necessary steps to classify its international business as discontinued operations in its consolidated financial statements, both for current and historical periods. Part of the net proceeds from the sale, as well as funds from the repayment of Kalera’s outstanding Secured Convertible Bridge Promissory Note, will be used to cover the costs associated with the court-supervised process and settle existing liabilities of KAL GmbH. In addition to this important step, Kalera remains committed to maximizing cash flow generation and reaching a cash flow positive position before the end of Q1 2023. As part of this effort, the company is also actively divesting its seed genetics business, Vindara, to further strengthen its financial position.