Ellington

JACKSON, Miss. (AP) — Biofuel maker KiOR is laying off employees as it idles its Mississippi refinery, intensifying questions about the future of the cash-strapped company.

The company said Wednesday that it has cut 18 employees. KiOR, based in Pasadena, Texas, said 55 employees remain at the Columbus plant.

"Given the company's limited cash flow, we do anticipate additional layoffs as we finish getting the Columbus plant in a 100 percent safe, idled state," the company said in a statement. "This will occur as required over the next one to two months."

The plant stopped production in December, when it had about 100 employees.

KiOR says it's focusing on research and technical improvements. The company said in May it was idling the $225 million Columbus plant, meant to make oil from wood chips. KiOR has faced problems reliably producing the amount of oil that the plant was designed to make.

KiOR reached a deal to stave off an impending debt default, borrowing $25 million in May from an entity controlled by Vinod Khosla, who also owns 64 percent of the company's stock. But that's only enough to sustain operations through August.

Stock filings indicate KiOR has drawn down $10 million so far. Khosla is supposed to agree that KiOR has met "certain performance milestones" before each installment.

The company owes nearly $280 million, including $69.4 million to the state of Mississippi.

The state loaned KiOR $75 million to help its startup, one of a number of investments made by Gov. Haley Barbour's administration in alternative-energy companies. KiOR has been making scheduled loan payments.

Mississippi Development Authority spokesman Jeff Rent said the next $1.875 million loan payment is due June 30. If the company were to default or file bankruptcy, the state would be the first creditor in line and could seize the company's plant.

KiOR has plans to build a second facility in Natchez, but local officials have said they could offer the property to another user.

The company is under investigation by the Securities and Exchange Commission, and KiOR faces two class-action federal lawsuits in Texas, both of which claim the company made false or misleading statements about its progress and biofuel production levels.