Advanced biofuel company, KiOR, Inc. has finally waved the white flag and filed for Chapter 11 in the US Bankruptcy Court for the District of Delaware after several months of dire warnings during earnings calls that the company has been running out of funds and still has over two hundred million dollar debts to pay to various creditors and lenders.
In January 2014, the company shut down its Columbus, Mississippi, plant, which aimed to convert biomass to fuels using catalytic cracking process. KiOR started as a joint venture based in Houston, Texas in late 2007 formed by Khosla Ventures and Netherlands-based biofuel startup, BIOeCON.
KiOR said it has accepted a bid for substantially all of its assets from certain affiliates of Vinod Khosla. The Company’s non-operational production facility in Columbus, Mississippi, which is owned by a wholly-owned subsidiary of KiOR, is not included in the filing.
During the bankruptcy proceeding, KiOR has entered into an agreement for debtor-in-possession (“DIP”) financing with an affiliate of Khosla, which will provide up to $15 million of additional financing for the Company to fund operations while in Chapter 11 and facilitate the sale and restructuring process.
KiOR anticipates the sale of the assets by December. The company has already been delisted from the trading on the NASDAQ stock exchange since November 6. The company said it will refocus instead on R&D.
For more brief background on the company’s history, you can read this interesting article from GigaOm. While it is unfortunate that there will always be some who will not make the cut when it comes to advancing new and disruptive technologies, hopefully this kind of news will not discourage further investments in the field of clean technologies, biofuels and renewable chemicals. After all, it took several decades before the petroleum and petrochemical industries made its own success stories.