KiOR: Money will run out next of money month, bankruptcy possible
Published: August 13,2014
Tags: bankruptcy, biofuel, debt, economic development, energy, forebearance, Guggenheim Partners, incentive, KIOR, loan, Mississippi Department of Employment Security, Mississippi Development Authority, REFINERY, Vinod Khosla
COLUMBUS — Struggling biofuel firm KiOR says in a financial filing that it will run out of money by September and that bankruptcy could follow.
The company, which built a refinery in Columbus to turn wood chips into synthetic oil, owes Mississippi $69.4 million. The Mississippi Development Authority has agreed to delay payments until the end of October to give KiOR time to raise new money or sell the company. Investment bank Guggenheim Partners was hired by KiOR, based in Pasadena, Texas, to seek a buyer or new investors.
“Without additional financing the company will be unable to fund its operations and meets its obligations past approximately September 30, 2014,” KiOR stated in a Monday stock filing.
KiOR said it lost $24.4 million, or 22 cents per share, in the three months that ended June 30. That’s down from a loss of $38.5 million in the same three months of 2013, or 36 cents per share, as the company cut expenses.
The company had $544,000 in cash on July 31. Entities controlled by billionaire backer Vinod Khosla have been lending the company enough money to stay alive, in order to “preserve, protect and prepare for the sale or disposition of the company’s collateral” and to “enhance the likelihood and maximize the amount of repayment” of existing debts.
Debt actually fell to $250 million, as a lender wrote off nearly $39 million that the company owed. The company has spent a total of $629 million since it was founded, but says it would need to raise as much as $60 million to keep going for another 12 months, even if it didn’t try to restart operations in Columbus.
KiOR told the Mississippi Department of Employment Security last month that it plans to lay off another 15 employees in Columbus by the end of this week. The company already laid off 13 employees there and has said it’s reducing employment as it shuts down operations there.
KiOR has said Guggenheim should complete its work by Oct. 31, the same time that KiOR’s forbearance agreement with Mississippi runs out. Under it, KiOR paid $250,000 to the Mississippi Development Authority and MDA allowed KiOR to delay a $1.9 million payment on KiOR’s no-interest loan from the state.
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