The company that purchased the equipment from KiOR’s failed biofuels plant in Columbus will sell, scrap or relocate it from the site, officials said Wednesday.
Georgia Renewable Power purchased the equipment last Friday for $2.1 million, according to Derek Henderson, a Jackson attorney who a judge assigned to manage KiOR’s receivership when the Texas-based company declared bankruptcy earlier this year. Georgia Renewable Power plans to remove the equipment by March 2016.
Henderson said KiOR sold a separate piece of equipment — a Hydro-treater system — to Iowa-based Renewable Energy Group “several weeks ago” for $1.6 million.
The $1.6 million KiOR earned selling the Hydro-treater system to REG will be used to pay back the Mississippi Development Authority, according to Henderson. MDA is owed $1.3 million immediately to cover the expenses they have put into the site since February.
Henderson told The Dispatch the $1,104,038 that KiOR owes Lowndes County would be coming out of the $2.1 million made selling the other equipment to Georgia Renewable Power on Friday.
KiOR built a $230 million plant on The Island, where they hoped to convert wood to biofuel. The project never came to fruition.
MDA loaned KiOR $75 million. Approximately $69 million of that loan is still owed to the state. MDA spokesperson Jeff Rent on Monday said his office could not comment on how the loan would be paid back until the receivership is settled in Lowndes County Chancery Court.
Henderson said any money left over after Lowndes County is paid will go toward resolving KiOR’s debts with the state and other creditors.
“What’s left will go into the pot and then the creditors will either agree on who gets what or I’ll pay it into the registry of the court and have the judge decide it,” Henderson said. “My guess is that they’ll just agree to split it somehow because it’s not going to be enough to incur the legal fees to fight over it.”
“Our current deal is to remove this equipment from this site,” said Steve Dailey, a vice president with Georgia Renewable Power.
Golden Triangle Development LINK vice president Macaulay Whitaker said Georgia Renewable Power will enter into a non-exclusive right to access with the Lowndes County Port Authority from January through March 2016. The agreement is not a lease, but amounts to Georgia Renewable Power paying rent while they remove the equipment. The KiOR site becomes county property January 1. Port Authority director Will Sanders confirmed the non-exclusive right to access arrangement between the Port Authority and Georgia Renewable Power but said the terms are still being negotiated. LINK CEO Joe Max Higgins said he believes it will be around $37,000 a month.
Garland Brothers, a Birmingham-based firm, has partnered with Georgia Renewable Power on this deal, according to Dailey.
“This is a joint venture for us and them,” Dailey said. “We purchased it and they are going to help us identify what can be resold in the market place.”
Garland Brothers, represented by Cal Garland, told The Dispatch on Monday that his company is interested in staying on The Island and opening a wood chip mill. Garland said they would like to use 10 of the 22 acres the KiOR site is on to dry wood chips and ship them along the Tombigbee Waterway to Mobile and ultimately to buyers in Ireland, who use wood chips to filter coal plants.
Garland’s plan is contingent on an agreement with the Lowndes County Port Authority, who would have to grant them permits to open a plant. Garland said he has spoken with Port Authority officials but could not say how successful those talks were.
Garland said the chip mill would employ 30 to 40 people directly. He said they would put about $10 million worth of new equipment into the new plant.
There appears to be a deviation in long term plans for Georgia Renewable Power and Garland Brothers.
Dailey said Georgia Renewable Power intends to move some of the equipment to their wood operations in Georgia and North Carolina, and partnered with Garland Brothers solely to sell the remaining equipment.
“Whether or not we stay and do something different is not even a subject that we can even begin to talk about,” Dailey said. “Our contract is to get rid of everything, because that’s what we bought it for.”
An auction for the KiOR property was scheduled for Oct. 15.
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