(Corrects description of fuel in first paragraph, spelling of name in headline.)
Sept. 26 (Bloomberg) -- Kior Inc., operator of the first U.S. commercial-scale cellulosic biofuel plant, rose the most on record after receiving a $50 million commitment from investor Vinod Khosla to double production capacity at its Columbus, Mississippi, plant.
Kior gained 58 percent to $2.89 at the close in New York, the most since the Pasadena, Texas-based company’s June 2011 initial public offering.
The backing from Khosla and his Khosla Ventures LLC company will support Kior’s planned $225 million Columbus II expansion project, according to a statement today. Construction will take about 18 months and will start within 90 days after “raising sufficient equity and debt capital to commence.”
The company’s Columbus site went into production in October and can produce as much as 13 million gallons (49 million liters) of transportation fuel a year from wood waste and non- food crops. The Columbus II project will boost that to 26 million gallons a year, Kate Perez, a Kior spokeswoman, said in an interview today.
The company has lost 55 percent of its market value this year as production at Columbus missed targets. Kior said in August that it shipped about 75,000 gallons in the second quarter, compared with a May forecast of as much as 500,000 gallons.
Khosla Ventures is Kior’s largest shareholder, with a 26 percent stake, according to data compiled by Bloomberg.
The additional support “should be well-received by jittery investors,” Pavel Molchanov, an analyst with Raymond James & Associates Inc. in Houston, said today in a research note. “By pledging an additional $50 million –- an anchor as Kior finalizes its long-term financing package –- Khosla guaranteed Kior’s financial security for at least six more months.”
Khosla’s commitment may include debt and equity investments, according to the statement.
--Editors: Will Wade, Charles Siler