KiOR Begins Laying Off Workers
COLUMBUS, Miss. (WCBI) — Any hope of alternative-fuels producer KiOR surviving its financial difficulties faded further today.
The company began laying off up to 25 percent of its remaining work force this morning. That’s about 20 workers, according to employees.
The company previously has said it faces bankruptcy bu August if it can’t raise more capital. So far, the company’s lone major remaining backer has only been providing $5 million a month by buying senior notes which amount to buying up the company’s assets.
The company opened its pioneering Columbus wood-to-fuels plant in late 2012 and operated for a year before idling the plant in January to try to raise more money and to make technical improvements.
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A company spokesperson says today’s layoffs are likely just the first.
“In an effort to maintain the plant and business respective to KiOR’s limited cash flow, we do anticipate additional layoffs as we finish getting the Columbus plant in a 100 percent safe, idled state. This will occur as required over the next one to two months,” Helen Murphy of Ink-PR said in an e-mail response to questions from WCBI.
Murphy says the company is current on the remaining almost $70 million loan it owes the state as part of incentives that helped bring the project to Columbus.
According to Jeff Kent of the Mississippi Development Authority, which oversees KiOR’s loan fro the state, KiOR’s outstanding loan balance is $69.375 million, and KiOR’s first three loan payments were made on time. As is outlined in the MOU signed in November 2010, the state is the primary lien holder on all KiOR equipment at the Columbus facility. In addition, the state, in cooperation with the Attorney General’s office, has retained special outside counsel specializing in work with distressed companies.
“At this time, KiOR is in compliance with the MOU. After July 1, and in the event they are delinquent on their loan payment, the state will begin action with the assistance of its legal counsel to recover money due to the state,” Rent said in an e-mail response to questions from WCBI.
“If KiOR becomes delinquent, full assessments will be made on all equipment including market value and feasibility of use in industry sectors,” Rent added.