By Claudia Assis/MarketWatch
SAN FRANCISCO (MarketWatch) — Shares of biofuels maker KiOR Inc. skyrocketed Tuesday on news the company is getting up to $25 million from billionaire backer Vinod Khosla to stay afloat.
KiOR shares rose 48%. The gains were chipping away at the losses the company has accumulated in recent months amid financial troubles. The stock has fallen 81% in the past 12 months and 48% in the past three months.
KiOR has developed technology to manufacture fuels from wood chips, grasses and other plant materials. But biofuel makers that don’t use corn as a raw material have had a hard time scaling their production to compete with gasoline. KiOR told regulators in March it had doubts about its viability as a company.
Kior On Tuesday, it told regulators it entered into a note purchase agreement with Khosla’s trust. The agreement covers multiple tranches of financing up to $25 million, and first tranche is expected to close on Thursday. The funding follows $100 million that KiOR had received in October from Khosla Ventures LLC and Bill Gates’ Gates Ventures LLC.
Khosla, the co-founder of Sun Microsystems, has backed the company from its beginnings. KiOR debuted on the Nasdaq in June 2011, priced at $5 a share. It raised $150 million.