JACKSON, Miss. (AP) — Mississippi will give struggling biofuel company KiOR another four months to raise money and resume repaying its $69.4 million debt to the state, passing up a chance to force the company into bankruptcy and seize its Columbus refinery, a state official said Thursday.
The state negotiated a short-term forbearance agreement with KiOR under which the company will pay Mississippi $250,000, and the state will agree not to press its claims for 120 days, Mississippi Development Authority spokesman Jeff Rent said in a statement he emailed to The Associated Press on Thursday.
Rent says the $250,000 is in addition to what KiOR already owes the state.
"MDA will continue to work closely with the company and monitor the company's progress during the term of the forbearance agreement and take all actions necessary to protect the state's interests," Rent said. He did not say why it is in the state's interest to delay the debt payment.
KiOR is based in Pasadena, Texas. The company owed Mississippi a nearly $1.9 million payment June 30 on what was originally a $75 million, no-interest loan. Kior said if it defaults, it could face demands from other lenders to immediately repay the entire $287 million that it owes.
A spokeswoman for KiOR declined to comment Wednesday and couldn't be reached for comment Thursday.
Mississippi relented after KiOR's longtime financier, Vinod Khosla, apparently refused to lend the company any more money. KiOR signed an agreement March 31 to borrow up to $25 million from KFT Trust, an entity controlled by Khosla, the billionaire co-founder of computer firm Sun Microsystems. KiOR said the money would be drawn in installments and Khosla could stop lending if the company didn't reach "certain performance milestones."
Stock filings show that, so far, KiOR has drawn only two $5 million installments, the last on May 22. In its May 12 quarterly financial report, KiOR said it hadn't met the milestones.
Khosla Ventures — the financier's Menlo Park, California, investment firm — controls 88.5 percent of KiOR stock. The company declined to comment Thursday.
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