Hoku signs financing agreement


POSTED: Wednesday, June 03, 2009

Hoku Materials Inc. has signed an economic-development agreement with the City of Pocatello, Idaho, that could provide up to approximately $43 million of tax-increment financing to Hoku over time.

The subsidiary of Honolulu-based Hoku Scientific Inc. said the Pocatello Development Authority has agreed to provide it with the financing as reimbursement for the company's capital costs in building site infrastructure at its polysilicon production facility in Pocatello. Polysilicon is the raw material used to make solar panels.

Hoku, which reports its fiscal fourth-quarter and year-end earnings on June 11, said the financing would be equal to 95 percent of the incremental property tax paid by Hoku, up to a maximum of approximately $26 million. In addition, once this initial $26 million cap is reached, Hoku will receive, as an incentive for hiring and maintaining certain numbers of employees, an additional tax reimbursement equal to 50 percent of the incremental property tax paid by the company, up to a maximum of approximately $17 million.

Hoku Chief Executive Dustin Shindo said the company expects to make its first polysilicon shipments this year.

Separately, Hoku said it has reached separate agreements with four key vendors: Idaho Power Co., Polymet Alloys Inc., BHS Acquisitions LLC and AEG Power Solutions USA Inc., formerly known as Saft Power Systems USA Inc.