The AP reported last week:Pasadena, Texas—November 9, 2014— KiOR, Inc. (OTC: KIOR) (“KiOR” or the “ Company ”) announced today that as part of its refocus on research and development, it has accepted a bid for substantially all of its assets from certain affiliates of Vinod Khosla that have been providing and will continue to provide senior secured financing to the Company. The Company has also filed for relief under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware (the “ Court ”). Under the Bankruptcy Code, the bid is subject to higher and better offers and Court approval. The Company’s non- operational production facility in Columbus, Mississippi, which is owned by a wholly- owned subsidiary of KiOR, is not included in the filing.During this proceeding, the Company has entered into an agreement for debtor-in- possession (“ DIP ”) financing with an affiliate of Mr. Khosla, which will provide up to $15 million of additional financing for the Company to fund operations while in Chapter 11 and facilitate the sale and restructuring process.As is customary, the Company has filed various “first day” motions with the Court seeking authority to continue its current business operations without interruption. The requests include authority to pay salaries and provide benefits to employees, authority to pay ongoing, undisputed obligations to vendors and suppliers that provide goods and services during the bankruptcy case, and approval of the DIP financing.KiOR anticipates moving through this proceeding as quickly as possible with a potential auction requested in December 2014, and the sale consummated as soon as possible thereafter. The bid and DIP financing are subject to normal closing conditions for transactions of this kind.Common stock investors should note that effective November 6, 2014, the Company has been delisted from trading on the NASDAQ stock exchange and that other creditors have priority over shareholders under the provisions of the U.S. Bankruptcy Code. The Company does not anticipate any recovery for existing KiOR common shareholders as part of these proceedings.Additional information regarding KiOR’s Chapter 11 proceedings can be found at http://dm.epiq11.com/KiOR .
Biofuel maker KiOR said Friday that the $1.8 million loan payment it missed to the state of Mississippi means it now owes more than $312 million immediately.
The company was supposed to make the payment to the Mississippi Development Authority by midnight Wednesday, the end of a grace period following a deadline of Oct. 31. No money was received.
Even before Wednesday, Mississippi sent a default notice saying KiOR owed the $69.4 million in principal, and $9 million-plus in interest trigged by the default, for a total of $78.6 million.
KiOR, based in Pasadena, Texas, borrowed $75 million from Mississippi to build a refinery in Columbus meant to make fuel from wood chips. But the $230 million plant never worked as designed and KiOR laid off almost all of its workers.
If payments had been made regularly, Mississippi would have charged no interest. The state had already delayed the deadline for the $1.8 million payment by 120 days, in exchange for a $250,000 payment. At the same time that extension was signed, KiOR hired investment bank Guggenheim Partners to sell the company or raise money.
KiOR said in a Friday stock filing that the default notice triggered provisions making another $234 million in loans immediately due in addition to what it owes Mississippi. Company officials did not respond to phone calls and emails Friday seeking comment.
"MDA was aware of the potential for cross default when the notice letter was sent to KiOR," authority spokeswoman Marlo Dorsey wrote in an email. "Throughout this process, MDA has taken the necessary steps to protect the state's rights and remedies."
Update: State Auditor Stacey Pickering issued this press release:
State Auditor Stacey Pickering issued the following statement regarding the Chapter 11 Bankruptcy of KiOR, Inc:“The Office of State Auditor has obtained information from MDA and we are working with all entities involved for a logical resolution to the facts under review.”