Bill Gates, Vinod Khosla up the ante in cellulosic biofuels pioneer KiOR

October 21, 2013 |

In Texas, KiOR announced the execution of $100 million in committed equity related financing in two separate private placement transactions to support the Company’s recently announced expansion of production capacity in Columbus, Mississippi, called  the Columbus II Project. Once completed with the planned technology enhancements for both Columbus facilities, the Columbus II Project is expected to achieve overall positive cash flow from operations for KiOR.

In the first private placement, KiOR has received $85 million of committed equity related financing from Khosla Ventures III, and various other Khosla entities. This financing consists of the immediate issuance of $42.5 million of Senior Secured Mandatorily Convertible Note plus the conversion of $53,197,308 of the Company’s existing senior debt held by the Khosla entities. The Notes will convert into Class A Common Stock at a price of $2.897 per share.

Also as part of this transaction, the Company has received commitments to purchase up to an additional $42.5 million of Class A Common Stock, either through the direct issuance of such equity or conversion of Notes. The conversion of the Notes and the future equity related commitments are contingent upon, among other things, the Company fully funding the Columbus II Project, which it expects to complete through a debt offering, and certain timing restrictions.

In the second private placement, KiOR has received $15 million of committed equity financing from new investor Gates Ventures, LLC, an affiliate of Bill Gates. This equity financing consists of the immediate purchase of $7.5 million of Class A Common Stock and the commitment to purchase an additional $7.5 million of Class A Common Stock. The future equity commitment is contingent upon, among other things, the Company fully funding the Columbus II Project.

The Digest will have full coverage of the news, including complete industry reaction, in its Wednesday October 23 edition.

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