KiOR has failed to meet a deadline to pay a $1.85 million installment payment to the Mississippi Development Authority, MDA spokesperson Marlo Dorsey confirmed Saturday.
The struggling renewable fuel company, which suspended production at its Columbus plant in January, had agreed to pay the MDA $250,000 in return for a 90-day forbearance on its June payment. The forbearance period ended Friday at midnight.
KiOR has a grace period of three business days to make that payment, which would end at the end of day Wednesday.
In a news release Friday afternoon, MDA did not go into the specifics of what happens next.
“MDA, along with its outside counsel and financial advisors, will take every measure available to aggressively protect the state’s assets in the KiOR project,” the news release stated.
KiOR did not respond to emails sent to the company this week.
The company is backed by venture capitalist Vinod Khosla, who controls 88.5 percent of KiOR stock, and a group of investors that include Microsoft founder Bill Gates. The company shut down production of its Columbus plant which makes oil from wood chips and other biowastes in January. The company had failed to meet its production goals even after a longer-than-anticipated start-up period.
Since negotiating a deal to set up operations in Columbus in 2010 and beginning production in November 2013, the company has made three $1.85 million payments on a $75 million MDA loan. KiOR owes the state a balance of $69.4 million.
Lowndes County Board of Supervisors President Harry Sanders said Saturday the local investment is small.
“The City of Columbus, Lowndes County and the Port Authority put up $60,000 each, mainly to pave the roads, which we still own, obviously, so we’re not out much.” Sanders said.
What the county, its schools and the city will miss out on, however, is roughly $1.1 million in annual fee-in-lieu revenue, which comes due each February. The fee-in-lieu payments were to start only after the plant was operational, so the county and city have received just one payment, with another due this February.
“We’ll be first in line with whatever those fees turn out to be,” Sanders said. “It’s like not paying your property taxes. Anybody who comes in to take over the property has to satisfy that first.”
According to The Associated Press, KiOR owed $250 million as of June 30, with only $544,000 of cash on hand. The company has spent more than $629 million pursuing its plan to turn wood chips into oil.
KiOR laid off 18 of its 55 workers in June and has laid off most of its other workers since then.
In July, the company, which had invested $218 million in building the Columbus plant, announced it had hired a firm to perform financial advising and assist in exploring a possible merger or sale.
Earlier this week, NASDAQ announced that it would drop KiOR from its listings, effective Nov. 6. The company’s public stock was closed at 8 cents per share Friday.
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].
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