Hoku Scientific Inc. has finalized a deal to sell 60 percent of its stock to a Chinese customer and investor in exchange for a much-needed financial infusion that will enable the Honolulu-based company to proceed with full-scale construction of the polysilicon plant it is building in Pocatello, Idaho.

The transaction, which was announced in September but closed yesterday, resulted in Hoku handing nearly 33.4 million newly issued shares of common stock to Tianwei New Energy Holdings Co., as well as a warrant that will enable Tianwei to buy an additional 10 million shares of Hoku's common stock at a price per share equal to $2.52.

Hoku's shares closed yesterday down 11 cents to $2.46 after the announcement.

The company, which had slowed production at the plant to preserve cash, previously had said it was on the brink of Chapter 7 liquidation for its polysilicon subsidiary. Polysilicon is the raw material used to make solar panels.

“;With our near-term liquidity crisis behind us, we can now focus on the execution of our polysilicon and PV (photovoltaic) systems installation business strategies,”; said Dustin Shindo, chairman and chief executive officer of Hoku. “;We feel that Tianwei is the right strategic shareholder for Hoku's long-term growth.”;

Besides its involvement in polysilicon, Hoku also operates a subsidiary that conducts solar installation in Hawaii.

In exchange for the shares of common stock, Tianwei has canceled $50 million of debt that Hoku had been obligated to pay under certain polysilicon supply agreements, and Tianwei is loaning Hoku $50 million through China Construction Bank.

Tianwei also has committed to assist Hoku in obtaining additional financing that may be required by Hoku to construct and operate the Pocatello facility.

Hoku said in late October during its fiscal second-quarter conference call that it still needed $71 million in funding in addition to what it would be receiving from Tianwei to complete construction and reach planned full production capacity of 4,000 metric tons a year for the $390 million plant. Hoku said at the time it expected to reach that full capacity by the second half of 2010.