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KiOR rated "Outperform" despite cash-for-scale-up concern

| August 15, 2011

In Texas, KiOR received an Outperform rating from Raymond James analyst Pavel Molchanov, who wrote that “the Columbus plant remains on track for a 2H12 start-up, with engineering 80% complete and construction 25% complete. Project enhancements will result in higher costs, but management targets total costs to be within 8-10% of the $192 million originally budgeted.

“Above and beyond execution at Columbus,” Molchanov wrote, “management is focused on securing debt financing for Newton, expected to have a stand-alone cost of ~$350 million. Inclusive of net IPO proceeds of $137.5 million, cash on hand was $207 million as of June 30. The plan remains to break ground on Newton late next year.”

Molchanov noted that “Management reiterated that they expect an initial yield of 68 gallons per dry ton of feedstock (Southern Yellow Pine) for Columbus at start-up, with the long-term target being 92 gallons/ton, and that emissions testing for KiOR’s distillates will take place in 3Q11 and will subsequently be submitted to the EPA.”

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