KiOR seeks Chapter 11 reorganization after asset bid received

November 11, 2014 |

In Texas, KiOR announced that as part of its refocus on research and development, it has accepted a bid for substantially all of its assets from certain affiliates of Vinod Khosla that have been providing and will continue to provide senior secured financing to the Company.

The Company has also filed for relief under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. Under the Bankruptcy Code, the bid is subject to higher and better offers and Court approval. 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 this proceeding, the Company has entered into an agreement for debtor-in-possession financing with an affiliate of Mr. 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.

As is customary, the Company has filed various “first day” motions with the Court seeking authority to continue its current business operations without interruption. The requests include authority to pay salaries and provide benefits to employees, authority to pay ongoing, undisputed obligations to vendors and suppliers that provide goods and services during the bankruptcy case, and approval of the DIP financing.

KiOR anticipates moving through this proceeding as quickly as possible with a potential auction requested in December 2014, and the sale consummated as soon as possible thereafter. The bid and DIP financing are subject to normal closing conditions for transactions of this kind.

Common stock investors should note that effective November 6, 2014, the Company has been delisted from trading on the NASDAQ stock exchange and that other creditors have priority over shareholders under the provisions of the U.S. Bankruptcy Code. The Company does not anticipate any recovery for existing KiOR common shareholders as part of these proceedings.

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