July 10, 2014 11:04:29 AM
KiOR has hired a firm to perform financial advising and assist in exploring a possible merger or sale.
The company, which built a $218 million plant in Columbus in 2011, made the announcement in a filing to the U.S. Securities and Exchange Commission Wednesday.
The development comes 10 days after the alternative fuel company did not make its latest scheduled $1.875 million loan payment to the Mississippi Development Authority. KiOR made the first three payments it owed.
An MDA spokesperson told The Dispatch last week that a short-term forbearance agreement between the two parties had been negotiated, allowing KiOR to pay $250,000 in exchange for the state postponing collection efforts for four months while the company "explores various strategic transactions." MDA loaned KiOR $75 million in 2010.
In the filing, the company said it intended to decide what its next action would be before the forbearance agreement ends on Oct. 31 and, at a minimum, make substantial progress toward completing that process. If the company doesn't pay its $1.875 million loan payment or complete a transaction by the end of the forbearance period, MDA can declare all of KiOR's obligations due, including principal and interest.
Guggenheim Securities was the firm KiOR chose to help oversee the process. It is a global investment and advisory financial services firm headquartered in Chicago and New York.
In the filing, KiOR said it does not expect to comment on developments with respect to the exploration of alternatives until a plan is approved by its board of directors.
KiOR laid off 25 percent of its Columbus employees last month and officials said more layoffs were on the horizon because of limited cash flow. The facility employed 55 people as of last week.
The company entered into a $25 million deal in March with a company controlled by Vinod Khosla, a California billionaire investor. At the time, the company announced the deal would keep it out of bankruptcy through August. Khosla Ventures controls 88.5 percent of KiOR stock.
The company, whose plant is designed to convert wood chips to fuel, has been idle since December. At the time of that announcement company officials said they needed time to refine the conversion method.
Nathan Gregory covers city and county government for The Dispatch.
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