April 2, 2014 10:49:52 AM
KiOR announced that it had closed the deal Monday on $25 million in financing that will keep the biofuel maker's doors open at least through August.
The money came from a company controlled by Vinod Khosla, a billionaire California investor, and will be made in monthly installments worth $5 million, according to a Securities and Exchange Commission filing KiOR made earlier this week.
The first installment will arrive Thursday, according to the filing.
KiOR, a Texas-based alternative fuel maker, built a $218 million plant in 2011 that employs 110 people on The Island in Columbus. The company began converting wood chips to fuel a little more than a year ago. But the facility -- the first commercial-size cellulosic biofuel plant in the United States -- never reached full capacity as the company struggled to work kinks out. The plant has been shut down since December as KiOR works to solve its production problems.
The company stated in a SEC filing in March that without additional funding it would be in danger of defaulting on $279.5 million worth of debt, including a $75 million loan from the Mississippi Development Authority that the company still owes $69 million on.
The $25 million commitment from Khosla, the company's largest shareholder, ensures that a default will not happen in the short-term.
"We continue to focus our efforts on research and development and technical improvements," KiOR told The Dispatch in a statement Tuesday. "This funding gives us the time to do that."
KiOR officials also said they are actively seeking additional funding.
Fred Cannon, the company's CEO and president, said the plan was to upgrade the facility through the first three months of 2014 and then restart it in the year's second quarter. Asked Tuesday when the plant might start up, KiOR officials said, "We are not providing guidance on timing."
The plant's employees are still coming to work.
"There is a lot of activity at the facility as we complete the remaining work necessary to bring the facility to a safe idle state," KiOR officials said.