Home » NEWS » Banking & Finance » KiOR intends to find buyer for bankrupt plant

KiOR intends to find buyer for bankrupt plant

KiORMalouf 002_rgb

KiOR Inc., a biofuels manufacturer, is seeking bankruptcy reorganization, though its Columbus facility was left out of the filing, giving rise to hopes that a buyer may be found for it.

KiOR said in its Chapter 11 filing Sunday night in the U.S. Bankruptcy Court in Delaware that it does intend to find a buyer for the plant.

Joe Max Higgins, director of Columbus-based Golden Triangle Development, said that after the company’s financial problems surfaced this year, there were quite a number of inquiries and some visits by prospective buyers but that interest has cooled in the past 30 days.

There’s “still a chance the Columbus facility could be sold,” Higgins said.

Glitches in the production of the biofuel, which was to be made by heating wood chips and chemical catalysts, were another problem.

The Mississippi Development Authority said in a release Monday: “Despite the small-scale success of biofuel production at KiOR’s test facility in Pasadena, Texas, the Columbus plant and company failures reveal the technical and economic complications clean-tech companies have faced when attempting to scale fuel production to meet commercial market demands.”

The authority noted that Vinod Khosla, co-founder of Sun Microsystems, has led three biofuel companies — including KiOR in the summer of 2011 — to public stock offerings.

The Nasdaq stock market subsequently delisted KiOR, whose over-the-counter shares were selling for 3 cents apiece on Monday.

According to public reports, KiOR is named in two pending class action lawsuits based on allegations that it misled investors, and the Securities Exchange Commission has an outstanding investigation against the company.

The Pasadena, Texas-based company missed its $1.8 million semi-annual payment on Wednesday, a date established when the Mississippi Development Authority gave it a 120-day forbearance on the payment.

The Legislature approved a $75 million interest free loan for KiOR Columbus LLC in August 2010 and production started in November 2012, with 62 employees and 37 contract workers.

The balance owed on the loan is $69.4 million, but interest pushes the debt to $78.6 million.

The loan was intended to assist with the funding and opening of three biofuel plant locations in the state within the next five years.

KiOR said it planned to invest $500 million and create 1,000 jobs in the three facilities. Only the Columbus plant was built.

KiOR listed in its bankruptcy filing companywide debt of $261.3 million and assets of $58.3 million as of June 30, according to Bloomberg News.

KiOR said in an August regulatory filing that it wouldn’t be able to continue operations past September without additional money, Bloomberg reported.

Its losses since it was founded in 2007 total $629.3 million, with total revenue of $2.25 million since inception, according to Bloomberg.

“My office has been working closely with the Attorney General and State Auditor’s offices on this matter, and we are going to exercise every legal action possible to recover the money owed to the Mississippi taxpayers,” Gov. Phil Bryant said in a prepared statement.

The Legislature approved the funding for KiOR during Haley Barbour’s second and last term as governor.

“MDA … will remain vigilant throughout the KiOR legal process and will take every step necessary to protect the taxpayers of Mississippi,” the agency stated.

By Jack Weatherly

jack.weatherly@msbusiness.com

About Jack Weatherly

Leave a Reply

Your email address will not be published. Required fields are marked *

*