Mississippi officials say they didn't get any money from faltering biofuel firm KiOR on Friday, the deadline for the company to make a $1.9 million debt payment.
KiOR, based in Pasadena, Texas, has a grace period of three business days to make the payment, so it wouldn't officially break its agreement until midnight Wednesday.
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A spokeswoman for KiOR did not immediately respond to a request for comment Friday.
If the company hasn't paid by Wednesday, it's unclear what will happen. Mississippi could seize the plant in Columbus, incorporated as KiOR Columbus LLC, but that could put parent company KiOR Inc. into default on other loans and force bankruptcy.
"We'll enforce all of our rights available to us," Dorsey said.
KiOR owes $69.4 million to Mississippi on what was originally a $75 million, no-interest loan. On July 3, the state gave KiOR another 120 days to make the payment, in exchange for $250,000. At the same time, KiOR hired investment bank Guggenheim Partners to sell the company or raise money.
"Throughout the forbearance period, MDA, along with its outside counsel and financial advisers, has actively and continuously worked with KiOR on solutions to keep KiOR Columbus LLC from permanently closing or filing for bankruptcy protection," Dorsey wrote in an email Friday. "Those efforts continue today."
Spokesman Knox Graham said that as recently as Oct. 21, Gov. Phil Bryant spoke by phone with billionaire KiOR backer Vinod Khosla, seeking to resolve the situation. Khosla Ventures — the financier's Menlo Park, California, investment firm — controls 88.5 percent of KiOR stock. He and fellow investors including the Canadian province of Alberta and Microsoft founder Bill Gates have loaned the company more than $200 million.
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 synthetic oil by cooking them at high heat and pressure in the Columbus refinery. The process was supposed to be aided by special chemical ingredients, but the Columbus plant never worked as designed. The plant has laid off almost all its workers.
Mississippi has first claim to the assets of KiOR Columbus, but it's not clear what the plant is worth. Last year, KiOR wrote down the value of the facility by $185 million, saying that because of operational problems, accounting rules required it be listed as worth only scrap value. KiOR said that as of June 30, its property, plant and equipment was worth $50.8 million.
Joe Max Higgins Jr., CEO of the Golden Triangle Development LINK agency, said Friday that some companies have inquired about the plant, but said inquiries have tailed off in recent weeks. He said local officials favor a sale because, if the state takes the property, local governments will lose more than $1 million in yearly property tax payments.
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