JACKSON, Miss. (AP) — Alternative-fuel maker KiOR Inc. has borrowed enough money to keep operating through August.
The Pasadena, Texas, company, which has a $225 million plant in Columbus, Miss., had warned last month that it had to raise more money for research and plant improvements.
KiOR, in a stock filing Tuesday, said it had completed a deal to borrow $25 million from an entity controlled by Vinod Khosla, who also owns 64 percent of the company's stock.
The company says it expects to obtain the first $5 million installment Thursday.
A KiOR stock filing last month said additional installments would "be conditioned on the achievement of certain performance milestones to be mutually agreed between Mr. Khosla and us." The company has warned it needs to raise more money in the long run.
Spokeswoman Helen Murphy did not immediately respond to an email seeking comment.
KiOR had warned that without the money it would default on nearly $280 million in debt, including $69.4 million it owes to the state of Mississippi.
The state 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. 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.
The company is under investigation by the Securities and Exchange Commission, and KiOR faces two class-action federal lawsuits in Texas, both of which claim the company made false or misleading statements about its progress and biofuel production levels.
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.
The city of Columbus has also told KiOR it can't discharge industrial wastewater into the city's sewer system, saying it is harming sewage treatment.
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