Hoku Scientific Inc., once described by an alternative-energy analyst as “;The Little Engine That Could,”; is exploring a possible sale and has slowed down production at the polysilicon plant it is building in Pocatello, Idaho.

But Honolulu-based Hoku also said it is in discussions with “;several strategic and financial investors”; regarding debt and equity financing and that it still plans to complete the $390 million plant and begin limited shipments by the end of this year.

“;The key focus is to make sure business can continue to grow, including the completion of the polysilicon plant,”; said Dustin Shindo, chairman, president and chief executive of Hoku. “;So to that end, considering selling the business is an important option, but it isn't the primary focus.

“;We think it will take a few months to finish evaluating and pursuing these options, but during that time we'll have no layoffs, so that's firm evidence we think we'll get it done and that we have the right people to do it.”;

Hoku had 28 employees as of March 31, according to its latest Securities and Exchange Commission filing. However, Shindo, who declined to provide an exact figure, said the company's total is more than that now, especially considering the outside contractors and professionals it has hired in conjunction with its polysilicon plant.

Polysilicon, the raw material used to make solar panels, was in great demand when Hoku announced in May 2006 that it was shifting its emphasis from being a fuel-cell technology developer and putting the majority of its resources into polysilicon. But the polysilicon spot price has fallen 70 percent over the last six months as the credit crunch has slowed the growth of the industry.

“;Solar systems are financed with credit similar to housing,”; Shindo said. “;If you don't have credit, you can't buy houses, and if people aren't buying houses, the price of the houses fall. If no one can finance solar systems, there's not as many sales and the price of polysilicon falls. That makes it challenging.”;

Hoku said it still needs at least $106 million to complete its 4,000 metric-tons-per-year polysilicon plant. So far, the company said, it has secured approximately $243 million in customer prepayments, with more than half of those commitments already in hand. In addition, Hoku has put in $41 million of its own money.

“;Given our current market capitalization ($48.1 million), it is unlikely that we will be able to secure the capital we need without selling a majority of our stock or assets,”; Shindo said. “;That being the case, we are seeking a strategic buyer for the company while simultaneously seeking debt and equity financing alternatives.”;

Hoku said it has retained Deutsche Bank Securities as its financial adviser to seek a possible sale.

Shindo said the sale could include the entire company; the Hoku Materials subsidiary, which includes the polysilicon plant; or Hoku Solar, which is the company's Hawaii solar-installation subsidiary.

Hoku no longer conducts research and development on fuel-cell technology, but still keeps in touch with select companies, Shindo said.

The company, which has six China-based polysilicon customers, has been amending contracts to help both itself and its customers who have been hurt by the economic slowdown. Hoku said earlier this week it received an early payment of $5 million from Tianwei New Energy Holdings Co. and said yesterday it has amended its supply contract with Suntech Power Holdings Co. to delay deadlines.

“;At the beginning we planned to ship more in 2009,”; Shindo said. “;But as the economy and situation changed, not just for us, but also for our customers, we mutually agreed to adjust those delivery dates and timing. Our customers are very supportive in the completion of the plant, and rightfully they should be because they're a big part of the financing and they have something at stake.”;