Key Developments For Hoku Scientific, Inc.
Hoku Scientific, Inc. (HOKU.O) (Consolidated Issue listed on NASDAQ Global Market)
Hoku Scientific, Inc Announces Amendment To Contract With Jinko
Hoku Scientific, Inc and Jinko Solar Co., Ltd. announced the amendment of the polysilicon supply agreement in effect between the two companies. According to the terms of the amendment, both companies have agreed to reduce the term of the sales agreement by one year, and to delay the first shipment date from December 2009 to December 2010. This will result in a 10% reduction of the total volume of polysilicon to be sold by Hoku to Jinko. The pricing and other commercial terms of shipment for the remaining nine years remain unchanged.
Hoku Scientific, Inc Subsidiary In Discussions For Debt and Equity Financing; Provides Update On Possible Sale Of Company
Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc, announced that it is in discussions with several strategic and financial investors regarding debt and equity financing. While the Company reported that the various sources of funding look promising, it expects it will need a few months to work through these options. Hoku also reported that, in addition to seeking debt and equity alternatives, it had retained Deutsche Bank Securities, Inc. as its financial advisor to seek a possible sale of the Company.
Hoku Scientific, Inc and Suntech Amend Supply Agreement to Adjust Milestone And Shipping Schedules
Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc., and Suntech Power Holdings Co., Ltd announced that they have amended their polysilicon supply contract to delay the deadlines for Hoku to achieve three polysilicon plant operation milestones. The effectiveness of the amendment is contingent on Hoku entering into a definitive agreement that would result in a change of control of Hoku, and the closing of any such transaction by March 31, 2010. The Company confirmed that it has retained Deutsche Bank Securities Inc. as its financial advisor to seek a possible sale of Hoku. Before the amendment becomes effective, Suntech has the right to terminate the contract if Hoku is unable to successfully complete a polysilicon reactor test demonstration, ship the first monthly quantity of polysilicon, or achieve a trichlorosilane (TCS) plant operation milestone, by September 30, 2009, December 31, 2009, and December 31, 2009, respectively. As amended, Hoku's deadlines to achieve these milestones may be moved to December 31, 2009, March 31, 2010, and December 31, 2010, respectively. In exchange for Suntech extending these deadlines, Hoku has agreed in the amendment to reduce Suntech's aggregate prepayment obligation. The prepayment reduction is effected through the elimination of the TCS plant operation milestone payment.
Hoku Scientific, Inc's Unit and Tianwei Amend Supply Agreements To Accelerate Prepayments And Adjust Shipping Schedule Date
Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc announced that they have amended their two polysilicon supply contracts to accelerate $5 million of the remaining $7 million in prepayments that Tianwei was obligated to pay to Hoku, eliminate Hoku's near-term shipping obligation to Tianwei, and adjust the long-term contract price. Tianwei had already paid Hoku a combined $74 million in prepayments through April 30, 2009. Before the amendments, Tianwei was obligated to pay Hoku an additional $7 million upon Hoku's first shipment of products in 2010. In exchange for a long-term contract price adjustment, Tianwei agreed to pay $5 million of this remaining $7 million up front, and eliminated the requirement that Hoku ship polysilicon to Tianwei before March 2010. These early shipments would have been additive to the long-term contract amounts, and Hoku's failure to make these shipments would have resulted in a price penalty. The remaining $2 million is to be paid when Hoku commences polysilicon shipments to Tianwei in 2010. As of June 30, 2009, Tianwei has paid to Hoku a combined aggregate of $79 million in prepayments for future product deliveries. Hoku reported that the average prices over the ten-year term of each contract were adjusted downward by 8%, such that the total amounts payable over the ten-year term of both agreements was reduced from approximately $511 million to approximately $468 million.
Hoku Scientific, Inc's Hoku Materials, Inc. And Solargiga Energy Holdings, Ltd.'s Wealthy Rise International, Ltd. Announces Amendment To Polysilicon Supply Agreement
Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc and Wealthy Rise International, Ltd., a wholly owned subsidiary of Solargiga Energy Holdings, Ltd. announced an amendment to the polysilicon supply agreement in effect between the two companies.According to the amended contract, the total volume of polysilicon to be sold by Hoku to Wealthy Rise will be reduced such that up to approximately $136 million may be payable to Hoku over a ten-year period, subject to product deliveries and other conditions. The amended contract also adjusts the date when Hoku is obligated to commence shipments of polysilicon by three months from March 31, 2010, to June 30, 2010, as well as adjusting the dates for price adjustments and termination rights in the event of a delay in commencing shipment. Wealthy Rise has the right to terminate the amended supply agreement, and recover any prepayments made, if Hoku has not commenced shipments by October 31, 2010, and Hoku has the right to terminate the agreement, and retain all prepayments received, if Wealthy Rise fails to pay any of its future prepayments when due. Hoku received an initial deposit of $7 million from Wealthy Rise after signing, and the amendment requires that Wealthy Rise make four additional deposits in June, August, October and December 2009, each in the amount of $3.3 million. Wealthy Rise will make a final payment of $200,000 upon receipt of the first shipment of product from Hoku.
