JACKSON, Miss. (AP) — Alternative-fuel manufacturer KiOR Inc. is idling its $225 million plant in Lowndes County while it tries to raise money for more research and plant improvements, but is warning that it could default on its debts and file for bankruptcy as early as April 1 if unsuccessful.
“We deny any allegations of wrongdoing and intend to vigorously defend against these lawsuits,” the company wrote.
The disclosure came in the company’s end-of-the-year financial filing Monday with the U.S. Securities and Exchange Commission.
In that filing, KiOR said a twin plant announced for Lowndes County will not occur until late 2015 — if at all. KiOR, of Pasadena, Texas, said the U.S. Securities and Exchange Commission subpoenaed information Jan. 28 about the status of the Columbus plant and biofuel output projections as part of an investigation.
The state of Mississippi loaned KiOR $75 million to help its startup, one of a number of investments made by Gov. Haley Barbour’s administration in alternative-energy companies. KiOR has been making scheduled payments on the loan, but still owes $69.4 million.
Jeff Rent, a spokesman for the Mississippi Development Authority, said the state is meeting with KiOR and watching the situation. If the company were to file bankruptcy or default, the state would be the first creditor in line, and could seize the company’s plant.
It’s not clear how much the facility would be worth, though. In the stock filing, KiOR wrote down the value of its Columbus facility by $185 million and the value of design costs for a planned Natchez refinery by $11.3 million. The company said the remaining value of its assets is $86 million.
As of Feb. 28, KiOR said its debts totaled $279.5 million, including $203.3 million owed to others.
The biggest of those investors is Californian Vinod Khosla. Last week, he committed up to another $25 million to the company. That commitment will be made in monthly installments of no more than $5 million each month “and will be conditioned on the achievement of certain performance milestones to be mutually agreed between Mr. Khosla and us,” the filing states.
KiOR said that money could carry it through August. But other than Kholsa, the company said it had no financing prospects.
The alternative-fuels plant started operating 18 months ago but has been plagued by operational and financial difficulties. The plant stopped production in December. The filing gives no timetable for any plant restart or what may happen to its 100 employees. Last month, company President Fred Cannon said those workers would remain.
In January, the company announced it planned to stop operations during the first three months of this year for modifications to improve efficiency and output.
KiOR already faced two class-action federal lawsuits in Texas claiming that it had made false or misleading statements about progress at Columbus or biofuel production levels.
The company said it is cooperating with the Jan. 28 subpoenas from the SEC on the same matters, but said it couldn’t predict the outcome.
By JEFF AMY, Associated Press | March 18, 2014