HOUSTON (ICIS)--KiOR has suspended its optimisation work and has idled its Columbus, Mississippi, biofuel plant as it attempts to navigate a dire financial situation, the US producer confirmed on Wednesday.
In a filing this week with the Securities and Exchange Commission (SEC), KiOR said that the plant’s “safe, idle state” will enable it to restart following additional research and pending the raising of additional capital.
Research is underway at the Columbus plant as well as at KiOR’s demo plant in Pasadena, Texas, the company told ICIS on Wednesday.
KiOR secured a conditional $25m loan at the end of March from venture capitalist Vinod Khosla and is working to secure more.
“KiOR is actively seeking funding from Mr Khosla and other sources. We cannot provide more specifics on funding at this time,” the company said on Wednesday.
Some $5m of the $25m loan was made available for use, but some or all of the rest will only be released upon achievement of performance milestones such as demonstrations that progress has been made on the company’s business and operational plans and that KiOR is likely to reach commercial success.
The $5m may not last the summer, KiOR said in its SEC filing.
“If the company is not successful in achieving its performance milestones or if it is otherwise unable to raise additional funds beyond approximately August 31, 2014, the company will not have adequate liquidity to fund its operations and meet its obligations [including its debt payment obligations], in which case it will likely be forced to voluntarily seek protection under the US Bankruptcy Code [or an involuntary petition for bankruptcy may be filed against the company],” KiOR wrote.
Still, additional funding or achieving the milestones may not stave off further financial reorganisation or permanent closure of the Columbus plant, the company warned in its filing.
As of 31 March, KiOR has accumulated $604.9m in debt, the company told the SEC, adding that it expects to have little to no revenue in 2014 unless it restarts the Columbus facility.
KiOR’s Columbus plant uses a modified refinery unit, a fluid catalytic cracker (FCC) to produce drop-in fuel made from biomass.
The company had planned to produce over 13m gal/year (49m litres/year) of gasoline, diesel and fuel oil blendstocks from the plant, but production has never matched expectations.
Total fuel production at the plant for 2013 was 894,000 gal.