Biofuel Producer KiOR Runs Out of Money and Plans to File for Bankruptcy

by San Antonio Attorney

Biofuel producer KiOR is said in a stock filing that all of its cash will be used up next month and that they may file for bankruptcy.

KiOR is a refinery that produces synthetic crude oil out of wood chips. It owes $69.4 million to Mississippi. The Mississippi Development Authority has given the company until October to pay or sell the business. KiOR has hired Investment bank Guggenheim Partners to look for new investors or a buyer.

In the three months that finished June 30, the firm lost 22 cents per share or $24.4 million, which is lower than the $38.5 million loss in the same period last year 2013, as the company narrowed down its expenses.

As of July 31, KiOR had $544,000 in cash. The company has been borrowing funds from entities owned by Vinod Khosla in order to keep the operations going.

KiOR’s debt dropped to $250 million, as a lender cancelled almost $39 million of its loan. The firm has poured in around $629 million since it began, but claims it would have to come up with $60 million to continue for another 12 months, regardless if it did not resume operations in its Columbus fuel facility.

The company informed the Mississippi Department of Employment Security that it will lay off an additional 15 workers in Columbus this week. There have already been 15 workers that were laid off and KiOR has said it is trimming employment as it closes operations there.

Guggenheim has to finish its work by the end of October, which is also the deadline of KiOR’s payment to Mississippi. Under the forbearance agreement with MDA, KiOR paid $250,000 to get the extension to a $1.9 million payment on a zero-interest loan from the state.

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