Alberta, Khosla loan biofuel company KiOR $75M

Next-gen biofuel company KiOR (s KIOR) has long planned to raise more money to get its first commercial-scale biofuel facilities off the ground. On Friday morning the company filed (and also announced) a new $75 million loan from existing investors Alberta Investment Management, a fund that manages billions on behalf of the province of Alberta, Canada, and Khosla Ventures, the venture firm that was an investor early on and now has voting and investment control over more than 60 percent of the outstanding shares of Class A common stock.
All the terms of the loan and repayment details are in the filing (if you are interested). Alberta Investment Management is also a limited partner in Khosla Ventures.
KiOR started building the initial stage of its commercial production facility in Columbus, Miss., in the first quarter of 2011, and the company plans to finish the facility by the first half of 2012. According to KiOR’s latest quarterly statement, that first project required another $114 million. KiOR plans to start building its larger standard commercial production facilities in the second half of 2012, in Newton, Miss., and this size of facility is expected to cost around $350 million.
According to the filing the Alberta group is loaning KiOR $50 million and Khosla Ventures is loaning KiOR $25 million. A portion of the loan will go to paying $6.72 million of existing debt.
KiOR has yet to generate any revenues, has accumulated a deficit of $115.4 million since inception, and expects to incur operating losses through at least 2013. The company won’t start generating revenues until at least the second half of 2012, assuming it finishes building its first initial-scale facility on time.
If KiOR can make it past this “valley of death” — where precommercial technologies move into commercial technologies — it could one day be a game-changer in the oil industry. KiOR has developed a technology that allows it to convert biomass into a bio substitute for crude oil.
Check out my extensive piece on KiOR I published a couple of weeks ago: The perils of cleantech investing: KiOR and the long-term, high-risk view. KiOR is trading around $12.60 in morning trading, slightly down on Friday, but up since the beginning of the year.