HOUSTON (ICIS)--KiOR remains confident it will secure the funding it needs by 1 April to avoid bankruptcy, the US biofuel maker said on Wednesday.
Earlier in the week, KiOR wrote in a filing with the Securities and Exchange Commission (SEC) that it had “substantial doubts” about its ability to continue operations, saying that it “must secure additional capital to provide us with additional liquidity”.
The producer did receive an investment commitment letter from US venture capitalist Vinod Khosla for up to $25m, final terms for which are being negotiated, KiOR said on Wednesday.
“While the [1 April] deadline is firm, we believe that we will be able to reach agreement on the funding commitment before that date,” the company said.
KiOR said in its SEC filing that if it does not secure the funding, it likely would default on its existing debt and “could be forced to seek relief under the US Bankruptcy Code”.
In December, KiOR shut down its biomass plant in Columbus, Mississippi, to optimise operations in an effort to get production at or near nameplate capacity. The project entails addressing issues with throughput, yield and overall process efficiency and reliability.
Currently, the plant is in a “phased idle state” while work on research and technical improvements are taking place, KiOR said. No timeline has been set on restarting the plant except that the producer plans to begin operations when research and development “proves sufficient” and the company receives additional funding, the company said.
KiOR had anticipated that the Columbus plant in Q4 2013 would have produced 410,000 gal (1.55m litres) of fuel, bringing full-year production to 920,000 gal. The ratio expected to be produced during the year was to be approximately 35% gasoline, 40% diesel and 25% fuel oil.
However, the plant only produced 385,000 gals of fuel for the quarter and 894,000 gals for the year.
The Columbus facility uses a process called biomass fluid catalytic cracking (BFCC) and has a nameplate capacity of over 13m gal/year (49m litres/year) of gasoline, diesel and fuel oil blendstocks.
KiOR is part of a federal class-action lawsuit filed in August, alleging that the company and its officers violated US securities law and misled investors about the business and its operations. It had projected that second-quarter fuel production at the facility would be 300,000-500,000 gal, but later, it announced production reached only 75,000 gal.