AquaBounty cited escalating costs of construction for putting the work being done in its Ohio recirculating aquaculture system (RAS) site on hold.
In a press release on June 2, the company said it will “evaluate the timing and cost of size and scope alternatives, including a phased approach to complete the project.”
AquaBounty has been working with its design and construction partners to manage and mitigate the increasing costs.
As cost estimates provided by the company’s initial design and construction firm continued to increase, AquaBounty engaged a second construction firm in January 2023 to review the current cost estimates and to rebid the remaining construction elements in order to finalize the project’s Guaranteed Maximum Price (GMP) which was integral to completing the municipal bond financing.
“Despite the value engineering and cost reduction efforts we undertook, the GMP estimate that we received came in at a price that is significantly above our previously disclosed estimate of US$375-395 million. Given this information, we cannot finance the project through a municipal bond placement without a significant increase in the company’s equity contribution,” said Sylvia Wulf, chief executive officer of AquaBounty. “As a result, the company has put an immediate pause on further construction of the site while the management team undertakes a detailed review of its strategic options, including evaluating a smaller scope or size for the farm.”
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