MDA grants KiOR forbearance after biofuels maker defaults on payment

COLUMBUS, Mississippi — In a sign that biofuel maker KiOR Inc.’s money troubles aren’t letting up, the start-up company will make a $250,000 forbearance payment to the Mississippi Development Authority in exchange for 120 days to get current on its nearly $70 million debt to the MDA.

KiOR defaulted on a $1.87 million payment that was scheduled for June 30. The $250,000 fee is a separate payment to the state that does not reduce the company’s liability to the state under the parties’ agreement, the MDA said in a press statement late Thursday. The agency said it granted the forbearance on advice of outside counsel retained with the help of Attorney General Jim Hood.

The state would be the first creditor in line and could seize the company’s plant if a default occurs on the remainder of the loan, the MDA says.

The Pasadena, Texas-based KiOR has faced problems reliably producing the amount of oil that the plant was designed to make.

KiOR said in May it was idling the $225 million Columbus plant, meant to make oil from wood chips and needed a significant cash infusion for further testing on the commercial applications for its product. More research and technological improvements are needed, it said.

The plant stopped production in December, when it had about 100 employees.

By mid June, it laid off 18 workers and said it anticipated cutting more of the remaining 55 workers.

The Associated Press reported in May that KiOR reached a deal to stave off an impending debt default, borrowing $25 million from an entity controlled by Vinod Khosla, who also owns 64 percent of the company’s stock. But that’s only enough to sustain operations through August, the AP reported.

Stock filings indicate KiOR has drawn down $10 million so far, AP reported on June 19. Khosla is supposed to agree that KiOR has met “certain performance milestones” before each installment.

The company owes nearly $280 million, including $69.4 million to the state of Mississippi.

The state loaned KiOR $75 million to help its startup, one of a number of investments made by Gov. Haley Barbour’s administration in alternative-energy companies. Until the June 30 default, KiOR had been making scheduled loan payments.

As recently as late September, KiOR portrayed its operations as successful and said it was poised to double its biofuels production in Columbus.

The increased capacity would entail building a second cellulosic fuels facility in Columbus at a cost of $225 million, the Associated Press reported.

BCAM purchases AmFed group

amfed logoSpecial to the MBJ

An Investor group led by the Builders and Contractors Associations of Mississippi Self-Insurers Trust has purchased Ridgeland-based AmFed Companies from Companion Property & Casualty Insurance Co. of Columbia, S.C. This purchase includes two Mississippi insurance companies.

BCAM Board Chairman Donnie Massey indicated that AmFed has served as the Third Party Administrator to BCAM for the past 17 years making this transaction virtually invisible to its producing agents and customers.

“This purchase allows BCAM to expand the scope of insurance products and services it has distributed through selected independent agents for the past 23 years,” said Massey. “It will be led operationally by investor group members Billy Roberts and Greg McLemore.”

Rob Rhodes, Chief Legal Officer of Companion, added, “The AmFed group is a perfect strategic fit for BCAM and we look forward to working with them through this transition.

The Builders and Contractors Associations of Mississippi was founded in 1991 and is the largest workers’ compensation insurance Fund of its type in Mississippi. It is located at 811 E. River Place, Suite 201, in Jackson.

Headquartered in Columbia, S.C., Companion Property & Casualty Insurance Group does business in 49 states through a network of independent agents, brokers and business partners.

AmFed National and AmFed Casualty Companies provide insurance solutions. Amfed Companies is located at 576 Highland Colony Parkway, Suite 300, in Ridgeland.

Is the SEC Network nearing a deal with Comcast?

SEC_ESPN_Network_LogoAccording to the Birmingham Business Journal, the new SEC Network appears to be nearing a deal with Comcast, the nation’s largest cable company.

According to Fox Sports, a spokesman for Comcast said the two sides are working out the final details of the deal and expect to reach an agreement in the near future.

The network launches in August. It has reached a carriage deal with AT&T U-Verse and DISH Network, but not with Directv or Charter, which is one of Birmingham’s largest carriers.

The head of the SEC Network recently spoke in Birmingham and said it isalarming some national carriers haven’t signed up to carry the network, but noted that deals are often reached closer to the launch date.

State’s first tea garden survives bad weather with some losses

msu logoBROOKHAVEN — Mississippi’s cold, wet winter and spring gave the state’s new tea farm its first test.

Owner Jason McDonald and business partner Timothy Gipson started the farm in October. Their 250 one-gallon plants and 10 three-gallon plants are thriving this summer, despite some losses.

“The plants actually did really well,” said Rebecca Bates, Mississippi State University Extension Service Lincoln County coordinator, who helped put together a team of MSU specialist to consult with McDonald in 2012 when he began planning the business venture. “We had some extremely cold weather this winter with snow and some ice. Spring brought a lot of rain and a few strong thunderstorms, but the plants look nice and are growing at a good rate.”

The excess rainfall in the spring and fire ants caused them to lose a few of the plants. However, losses are expected in any agricultural business, said Nigel Melican, a United Kingdom-based tea-growing consultant with Teacraft, Ltd.

“An established tea farm in a tea-growing country expects to have about 5 percent field losses, and Jason’s losses are in this ballpark,” said Melican, who is one of McDonald’s advisors.

The cool temperatures have helped the plants get established by giving them a chance to develop a strong root system, Melican said.

“Jason’s plants are growing strong and healthy,” he said.

In anticipation of the arrival of additional plants from a North Carolina nursery on June 17, McDonald and Gipson installed about an acre of shade cloth and irrigation pipe. The plants will grow under the shade cloth until they are ready for planting.

“We were expecting 60,000 plants, but we didn’t know until the truck arrived that the plans changed,” McDonald said. “We received about half that many. We ended up with 27,712 small liner plants and 1,217 gallon-sized plants.”

McDonald said the change would not delay the farm’s progress. They propagated cuttings from the first 260 plants they planted in October and will begin a larger propagation program as early as July.

“We can take cuttings off the gallon-sized plants within a couple of weeks and have a few thousand plants that we already started rooting,” McDonald said. “So we still have the 30,000 plants that we were planning to plant this year.”

Over the next three to four months, the new arrivals will be transferred to larger pots as they grow. McDonald said about half of the plants should be strong enough to be planted in the fall. The remaining plants will go into the ground next spring, he said.

McDonald recently renamed the farm The Great Mississippi Tea Company. Originally named FiLoLi Tea Farm, the change is intended to strengthen the farm’s connection to its home state. Facebook users cast votes on three different names, all of which included Mississippi.

“The change will help enhance interest in the farm and promote the local food movement,” McDonald said.

From the mid-1790s through the early 20th century, many individuals and the U.S. government tried to grow tea commercially in the United States. Most of the operations failed because of the labor-intensive nature of the crop, Melican said.

Although tea was mostly imported, a few briefly successful ventures included a 200-acre Summerville, South Carolina, farm commissioned by the government in 1880, and The American Tea Growing Company, established in 1901 between Savannah, Georgia, and Charleston, South Carolina. One year later, the American Tea Growing Company acquired the Pinehurst Tea Garden, which was established in 1900. These operations manufactured and sold tea, but both collapsed within a year or two when the proprietors fell ill or died, Melican said.

Tea drinking waned after the Boston Tea Party but picked back up toward the end of the nineteenth century. Americans preferred green tea imported from China until the 1904 St. Louis World’s Fair, where iced tea made from black tea was introduced, Melican said.

“During the first half of the twentieth century, green tea imports dropped from 60 percent to 5 percent in favor of black tea,” he said.

Today, Americans still love tea, and some are interested in growing it.

Guihong Bi, an ornamental horticulture researcher with the Mississippi Agricultural and Forestry Experiment Station and professor in the MSU College of Agriculture and Life Sciences, is directing the Mississippi Tea Project. The research project is aimed at evaluating tea cultivars from the U.S. and around the world to develop a cultivar for commercial production that is best suited to the Mississippi climate. Bi and graduate student Judson LeCompte are working with McDonald to carry out part of the goals of the study.

The work will help establish the best propagation and production protocols, labor management, an integrated pest and disease management program, and weed and nutrient control methods.

“Tea beverages are second only to water as the most popular beverage in the world, with over 79 billion servings sold in the United States,” Bi said. “We believe tea can be a viable alternative cash crop for conventional Mississippi farmers. The climate in Mississippi is ideal for growing camellias. Therefore, it should be suitable for tea production.”