Deal lifts pressure from 'volatile capital markets,' CEO Cannon says
By Susanna Moon
Chicago, Jan. 27 - KiOR, Inc. said it closed a $75 million 16% four-year term loan with a lender group comprising an affiliate of Vinod Khosla and two Canadian corporations owned by pension fund clients of Alberta Investment Management Corp.
The company, along with its wholly owned subsidiary, KiOR Columbus LLC, entered into a loan and security agreement with 1538716 Alberta Ltd., 1538731 Alberta Ltd. as agent and lender and KFT Trust, Vinod Khosla as trustee, according to an 8-K filing with the Securities and Exchange Commission.
KiOr obtained a $50 million term loan from the Alberta lenders and a $25 million term loan from Khosla.
Some of the loans will be used to repay about $6,724,000 of outstanding debt.
Under certain conditions, KiOR may elect to pay interest in kind instead of cash.
The loan is due Feb. 1, 2016.
The company may prepay the loan at any time at a prepayment premium, based on a percentage of the loan advance being prepaid, equal to 4% if the prepayment occurs by Jan. 26, 2013, 3% if the prepayment occurs from Jan. 26, 2013 to Jan. 26, 2014, 2% if the prepayment occurs from Jan. 26, 2014 to Jan. 26, 2015, or 1% if the prepayment occurs from Jan. 26, 2015 to Jan. 26, 2016.
In connection with the loans, KiOR granted the lenders a security interest in all or substantially all of KiOR's tangible and intangible property.
The company also issued warrants for 1,161,790 shares exercisable at $11.62 per share for seven years, which was the consolidated closing bid price for the company's shares on Jan. 25.
In addition, the company may be obligated to issue each lender one or more additional warrants to purchase shares if it elects to pay PIK interest.
"This follow-on investment in KiOR reaffirms the continued long-term commitment of two of North America's most knowledgeable renewable energy investors in light of KiOR's on-time and on-budget execution of its first commercial facility in Columbus, Mississippi; KiOR's continued progress toward yield improvements in its R&D program; and prospects for KiOR's larger, second facility in Mississippi planned to break ground after our Columbus facility is fully operational," Fred Cannon, the company's chief executive officer, said in a press release.
"The additional capital de-risks KiOR's near-term business plan, decreases KiOR's dependency on volatile capital markets and allows additional front-end engineering work on our second facility," Cannon added.
KiOR is a Pasadena, Texas-based development stage, next-generation renewable fuels company.
| Issuer: | KiOR, Inc.
|
| Issue: | Term loan
|
| Amount: | $75 million
|
| Maturity: | Feb. 1, 2016
|
| Coupon: | 16%
|
| Warrants: | 1,161,790
|
| Warrant expiration: | Seven years
|
| Warrant strike price: | $11.62
|
| Investors: | 1538716 Alberta Ltd.,1538731 Alberta Ltd. as agent and lender and KFT Trust, Vinod Khosla as trustee
|
| Pricing date: | Jan. 27
|
| Stock Symbol: | Nasdaq: KIOR
|
| Stock price: | $11.62 at close on Jan. 25
|
| Market capitalization: | $1.33 billion
|
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