October 21, 2013 10:27:05 AM
William Browning - email@example.com
KiOR, which announced last month its intention to build a second biorefinery in Columbus, has secured the funding it needs to move forward with the plan.
The Texas-based alternative fuel company announced Monday that it has received $100 million in committed equity financing from Khosla Ventures, an investment company based in California, and Microsoft chairman Bill Gates.
Khosla Ventures committed $85 million and Gates, through Gates Ventures, committed $15 million, according to a release from KiOR. Both commitments are contingent upon the company fully funding what it is calling Columbus II.
Columbus I, a biomass fluid catalytic cracking unit, began converting wood chips to fuel on the The Island earlier this year. It is a 500-ton per day facility. KiOR's plan is to build Columbus II -- also a 500-ton per day facility -- adjacent to Columbus I.
A ground-breaking date for the second facility has not been announced, though Fred Cannon, KiOR's president and CEO, said last month construction would begin within 90 days of the company raising sufficient equity to commence the project.
"The equity financing completes what we currently believe will be the last equity portion of the Columbus II project, which we believe will facilitate the ability...to achieve positive cash flow from operations sometime in 2015," Cannon said.
Company officials said Monday that KiOR still has plans to develop a standard scale commercial facility in Natchez. That facility is slated to be a 1,500-ton per day facility. Kate Perez, KiOR's director of corporate communications and public relations, has said in the past that construction is expected to begin on that facility during the second half of 2014.
But Cannon said on Monday that the construction of Columbus II will expand capacity at KiOR's Lowndes County site and "derisk project execution and allow us to showcase advancements at scale much quicker." Cannon also expects Columbus I to maybe increase production capacity to over 600 bone dry tons of feedstock per day before the end of 2014.
Once started, construction of Columbus II will take roughly 18 months, Cannon said.
"I was impressed when I visited KiOR's Columbus facility and learned more about the company's technology," Gates said.
Khosla Ventures and Vinod Khosla had previously committed $50 million to Columbus II.
Cannon has said that second plant will help KiOR make quicker progress toward its long-term goal of 92 gallons per bone dry ton of biomass.
The announcement comes in the wake of a pending lawsuit by a group of KiOR stockholders, who have complained about the company's inability to meet projected production targets at the facilities during the last quarter. The suit, filed by investor Michael Berry, says the potential class could have hundreds or thousands of participants, and is seeking damages for losses.