Hoku signs $284M deal
Hoku Scientific Inc.
said yesterday it has signed its sixth contract for production from its planned Idaho polysilicon plant, putting it over its estimated capacity.
The Kapolei-based alternative-energy company has signed a 10-year contract worth up to $284 million to supply polysilicon, a key material in making solar panels, to a subsidiary of Tianwei New Energy Holdings Co., a China-based manufacturer of silicon products.
Hoku Scientific Inc. has signed its sixth contract for its planned Idaho polysilicon plant.
|Tianwei New Energy Holdings Co., China
|Jiangxi Kinko Energy Co., China
|Solarfun Power Hong Kong Ltd., China
|Solar-Fabrik AG, Germany
|Suntech Power Holdings Co., China
|Sanyo Electric Co., Japan
*Contracts expired May 31 and may be changed.
Source: Hoku Scientific Inc.
It is Hoku's sixth major contract for shipments from its $390 million Pocatello, Idaho, plant, set to start commercial shipments in early 2009. The contracts are expected to generate total revenue of up to $2.3 billion.
Last week, the company said it had filled the remaining 500 metric tons of capacity from the plant's expected annual production of 3,500 metric tons when it signed a $298 million contract with China-based Jiangxi Kinko Energy Co.
Hoku said it would adjust delivery amounts or timing for two of the buyers, Sanyo Electric Co. and Solar-Fabrik AG's Global Expertise Wafer Division, which expired May 31, to allow for the new contract.
Suntech Power Holdings Co. and Solarfun Power Hong Kong Ltd., Hoku's other buyers, have extended contracts through Dec. 31.
The take-or-pay contract with subsidiary Tianwei New Energy Wafer Co. provides for the delivery of predetermined volumes of polysilicon each year, with the first shipment in early 2010 and the remainder during a 10-year period at prices set throughout the term.
Tianwei New Energy Holdings will pay a deposit of $15 million to Hoku this month, with additional deposits totaling $15 million by Nov. 15, $10 million by Jan. 15, and $5 million upon the first shipment. Tianwei will get a security interest in Hoku's polysilicon assets to secure Hoku's obligation to repay $45 million to Tianwei as a credit against product shipments over time.
The contract comes at a critical time for Hoku's plant financing. In June, the company entered into an agreement with UBS Securities LLC to offer up to $54 million in stock sales. Hoku said it needs $110 million for the plant's pilot production, set to begin later this year. Last week, Hoku said it had potentially raised half of that amount.