POCATELLO, ID and CHENGDU, CHINA, Sep 16, 2008 (MARKET WIRE via COMTEX) -- Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. established to manufacture and sell polysilicon for the solar market, and Tianwei New Energy (Chengdu) Wafer Co., Ltd., a subsidiary of Tianwei New Energy Holdings Co., Ltd. that manufactures silicon wafers, photovoltaic cells, and modules in China, today announced the signing of a second long-term contract for Hoku's sale and delivery of additional quantities of polysilicon to Tianwei over a ten-year period beginning in the second quarter of 2010.
According to the contract, up to approximately $227 million may be payable to Hoku during the ten-year period, subject to product deliveries and other conditions. Together with the first contract, this brings Tianwei's total orders from Hoku to approximately $511 million over ten years. The take-or-pay contract provides for the delivery of predetermined volumes of polysilicon each year, with the first shipment in the second quarter of 2010 and the remainder over a ten-year period at set prices that will decline throughout the term of the agreement. The contract also provides for a deposit of $10 million to Hoku in September 2008, and requires that Tianwei make additional deposits for products in the amount of $12 million by December 15, 2008, $12 million by April 30, 2009, and $2 million upon first shipment. Under the agreement, Hoku will grant to Tianwei a security interest in all of its tangible and intangible assets related to its polysilicon business to secure Hoku's obligation to repay $36 million to Tianwei as a credit against product shipments over time.
"We strive to develop solid relationships with suppliers who we view as long-term strategic partners for our mutual growth and success," said A. Guo, Tianwei's general manager. "Hoku shares this long-term view, and we are pleased to further solidify our relationship by placing this second order."
"Tianwei New Energy demonstrates an entrepreneurial spirit, and is backed by the strength of the Tianwei Group, an established leader in the power transmission equipment market in China," said Dustin Shindo, chief executive officer of Hoku Scientific, Inc. "Tianwei is an ideal long-term partner for Hoku, and we were happy to accept their second order."
With the $36 million in additional prepayments from Tianwei, Hoku has secured an aggregate of $306 million in prepayment commitments from its customers, including Suntech, Solarfun, Kinko Energy, and Wealthy Rise (Solargiga). These prepayment commitments will be paid to Hoku based on the terms of the respective agreements that Hoku has with each of its customers. Hoku previously reported its own cash contribution to the plant as $47 million. Combining the new total of $306 million in customer prepayment commitments with Hoku's cash contribution of $47 million brings the total committed project funding to approximately $353 million.
Shindo commented, "Considering the additional prepayments from our new contract with Tianwei and the anticipated timing of prepayment receipts from our other customers, we believe we have secured sufficient funding to keep the procurement and construction of our polysilicon plant on track through the first quarter of 2009, without the need to raise additional capital from financing in 2008. Nevertheless, we will continue evaluating market conditions to determine the best time to raise additional project funds that will be needed in 2009 through debt and/or equity."
Hoku previously reported that it was evaluating ways to increase the effective capacity of its facility beyond 3,500 metric tons of polysilicon production. Hoku recently finalized and obtained the necessary air permits from the State of Idaho to operate its plant at 4,000 metric tons of capacity.
Regarding capacity, Shindo noted, "This new contract with Tianwei increases Hoku's total allocated production output beyond 3,500 metric tons, but less than the 4,000 metric ton limit, which we have confirmed as the forecasted production output for our polysilicon plant. To enable this increase in our production capacity, we have previously designed our trichlorosilane production plant, vent gas recovery system, and select other infrastructure items to accommodate additional production output beyond 3,500 metric tons per year. We expect that continued progress on project development will help us refine our estimated construction and procurement costs. With improved visibility on forecasted expenses, and with the incremental increase in planned production capacity, we are evaluating any associated increases in total project costs. That said, we believe that the increase in planned production output from 3,500 to 4,000 metric tons per year will not require the purchase of any additional polysilicon reactors, trichlorosilane production equipment, or vent gas recovery equipment."
Showing posts with label Hoku Materials. Show all posts
Showing posts with label Hoku Materials. Show all posts
Wednesday, September 17, 2008
Thursday, May 15, 2008
Hoku and Solarfun Approve Amendment and Extension of Polysilicon Supply Agreement
May 13, 2008: 06:45 AM EST
Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU), established to manufacture and sell polysilicon for the solar market, and Solarfun Power Hong Kong Limited, a subsidiary of Solarfun Power Holdings Co., Ltd. (NASDAQ: SOLF), an established manufacturer of both photovoltaic (PV) cells and modules in China, today announced that they have amended their polysilicon supply contract to increase the term of the contract from eight to ten years. Total amounts that may be payable to Hoku Materials under the contract have increased from up to approximately $306 million for the eight year contract, to up to approximately $384 million for the amended ten year contract. Hoku Materials and Solarfun also agreed to a mutual right to terminate the supply agreement if Hoku Materials is unable to raise an aggregate of $75 million in financing for its polysilicon production plant by December 31, 2008 (including the $25 million that was already raised by Hoku Scientific's sale of common stock in February 2008). Solarfun may also terminate the agreement if Hoku Materials is unable to complete polysilicon shipment milestones and quality specifications by December 31, 2009.
"We're strengthening our relationship with Solarfun by extending the term from eight to ten years," said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. "A ten-year term allows us to better plan for our long-term operations, including the timing of future product sales and plant expansions. Adding the financing milestone gives each company the flexibility to terminate the contract if Hoku is ultimately unable to finance the completion of the plant. This makes sense for both companies, as it would be impossible to honor a long-term purchase and supply commitment if the plant is ultimately not built."
"We are pleased with the amendment of our contract with Hoku," said Solarfun's chief executive officer, Harold Hoskens. "We look forward to their timely delivery of polysilicon as scheduled by the 2nd half of 2009."
About Hoku Scientific, Inc.
Hoku Scientific, Inc. (NASDAQ: HOKU) is a diversified clean energy technologies company with three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. Hoku Materials plans to manufacture, market, and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar is a provider of turnkey photovoltaic systems in Hawaii. Hoku Fuel Cells has developed proprietary fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchange membrane fuel cells. For more information visit www.hokuscientific.com.
Hoku® and Hoku Scientific® are registered trademarks and Hoku Solar(TM) and Hoku Fuel Cells(TM) are trademarks of Hoku Scientific, Inc. Hoku Materials(TM) is a trademark of Hoku Materials, Inc. All rights reserved.
About Solarfun Power Holdings Co., Ltd.
Solarfun Power Holdings Co, Ltd. (NASDAQ: SOLF) manufactures both PV cells and PV modules, provides PV cell processing services to convert silicon wafers into PV cells, and supplies solar system integration services in China. Solarfun produces both monocrystalline and multicrystalline silicon cells and modules, and manufactures 100% of its modules with in-house produced PV cells. Solarfun sells its products both through third-party distributors, OEM manufacturers and directly to system integrators. Solarfun was founded in 2004 and its products have been certified to TUV and UL safety and quality standards. For more information visit www.solarfun.com.cn.
Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU), established to manufacture and sell polysilicon for the solar market, and Solarfun Power Hong Kong Limited, a subsidiary of Solarfun Power Holdings Co., Ltd. (NASDAQ: SOLF), an established manufacturer of both photovoltaic (PV) cells and modules in China, today announced that they have amended their polysilicon supply contract to increase the term of the contract from eight to ten years. Total amounts that may be payable to Hoku Materials under the contract have increased from up to approximately $306 million for the eight year contract, to up to approximately $384 million for the amended ten year contract. Hoku Materials and Solarfun also agreed to a mutual right to terminate the supply agreement if Hoku Materials is unable to raise an aggregate of $75 million in financing for its polysilicon production plant by December 31, 2008 (including the $25 million that was already raised by Hoku Scientific's sale of common stock in February 2008). Solarfun may also terminate the agreement if Hoku Materials is unable to complete polysilicon shipment milestones and quality specifications by December 31, 2009.
"We're strengthening our relationship with Solarfun by extending the term from eight to ten years," said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. "A ten-year term allows us to better plan for our long-term operations, including the timing of future product sales and plant expansions. Adding the financing milestone gives each company the flexibility to terminate the contract if Hoku is ultimately unable to finance the completion of the plant. This makes sense for both companies, as it would be impossible to honor a long-term purchase and supply commitment if the plant is ultimately not built."
"We are pleased with the amendment of our contract with Hoku," said Solarfun's chief executive officer, Harold Hoskens. "We look forward to their timely delivery of polysilicon as scheduled by the 2nd half of 2009."
About Hoku Scientific, Inc.
Hoku Scientific, Inc. (NASDAQ: HOKU) is a diversified clean energy technologies company with three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. Hoku Materials plans to manufacture, market, and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar is a provider of turnkey photovoltaic systems in Hawaii. Hoku Fuel Cells has developed proprietary fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchange membrane fuel cells. For more information visit www.hokuscientific.com.
Hoku® and Hoku Scientific® are registered trademarks and Hoku Solar(TM) and Hoku Fuel Cells(TM) are trademarks of Hoku Scientific, Inc. Hoku Materials(TM) is a trademark of Hoku Materials, Inc. All rights reserved.
About Solarfun Power Holdings Co., Ltd.
Solarfun Power Holdings Co, Ltd. (NASDAQ: SOLF) manufactures both PV cells and PV modules, provides PV cell processing services to convert silicon wafers into PV cells, and supplies solar system integration services in China. Solarfun produces both monocrystalline and multicrystalline silicon cells and modules, and manufactures 100% of its modules with in-house produced PV cells. Solarfun sells its products both through third-party distributors, OEM manufacturers and directly to system integrators. Solarfun was founded in 2004 and its products have been certified to TUV and UL safety and quality standards. For more information visit www.solarfun.com.cn.
Hoku and Suntech Announce Amended Polysilicon Supply Contract
Term Fixed at 10 Years; Financing Deadline Extended to December 31, 2008
May 12, 2008: 05:46 PM EST
Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU), established to manufacture and sell polysilicon for the solar market, and Suntech Power Holdings Co., Ltd. (NYSE: STP), one of the world's leading manufacturers of photovoltaic (PV) cells and modules, today announced that they have amended their polysilicon supply contract to confirm the ten-year term of the contract, which was previously subject to a mutual right for either party to unilaterally reduce the term to seven years. In addition, pursuant to the amendment, Hoku Materials has been granted a right of first refusal to deliver all or any portion of the polysilicon in the form of wafers on commercial terms that are no less favorable to Suntech than it would otherwise be able to obtain. Total amounts that may be payable to Hoku Materials under the ten-year term of the contract are approximately $678 million, plus amounts payable for excess shipments that may be delivered in calendar year 2009.
Suntech and Hoku Materials further agreed to extend the date when either party may terminate the supply agreement if Hoku Materials is unable to complete the financing for its polysilicon production plant until December 31, 2008, and to reduce the financing milestone to $75 million, including the $25 million that was already raised by Hoku Scientific's sale of common stock in February 2008. Prior to the amendment, either Hoku Materials or Suntech had the right to terminate the supply agreement if Hoku Materials was unable to secure an aggregate of $100 million on or before May 31, 2008, to finance the procurement and construction of its planned polysilicon plant in Pocatello, Idaho.
Suntech also agreed to use its best efforts to obtain trichlorosilane, or TCS, in 2008 and 2009 for Hoku Materials's use at its production facility. Hoku Materials plans to build on-site TCS production facilities as part of its polysilicon plant, which are expected to be complete in 2009; however, until Hoku Materials's TCS plant is complete, TCS from a third party will enable the commencement of production faster than otherwise possible. If Suntech is able to obtain TCS for Hoku Materials, then Hoku Materials will allocate to Suntech additional polysilicon production output in 2009 that is in excess of Hoku Materials's pre-existing 2009 customer commitments.
"These amendments reflect our mutual commitment to strengthening the long-term relationship between Hoku and Suntech," said Dustin Shindo, Chairman and Chief Executive Officer of Hoku Scientific. "Locking-in the term at 10 years gives us greater certainty in planning our long-term operations, while Suntech's commitment to help us obtain TCS in 2008 and 2009 could improve our near-term operating results. Allowing us a right of first refusal to deliver wafers gives us the flexibility to vertically integrate a downstream process if we decide to pursue that strategy in the future."
Dr. Zhengrong Shi, Suntech's Chairman and Chief Executive Officer, stated, "Hoku has made tremendous progress over the past year, and we are pleased to strengthen our relationship with them. Confirming the term at ten years gives Suntech more visibility on long-term polysilicon pricing that will further our goal of achieving grid parity in solar."
About Hoku Scientific, Inc.
Hoku Scientific (NASDAQ: HOKU) is a diversified clean energy technologies company with three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. Hoku Materials plans to manufacture, market, and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar markets, sells and installs turnkey photovoltaic systems in Hawaii. Hoku Fuel Cells has developed proprietary fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchange membrane fuel cells. For more information visit www.hokuscientific.com.
About Suntech
Suntech Power Holdings Co., Ltd. is a world leading solar energy company as measured by both production output and capacity of solar cells and modules. Suntech is passionate about improving the environment we live in and dedicated to developing advanced solar solutions that enable sustainable development. Suntech designs, develops, manufactures, and markets a variety of high quality, cost effective and environmentally friendly solar products for electric power applications in the residential, commercial, industrial, and public utility sectors. Suntech offers one of the broadest ranges of building integrated photovoltaic (BIPV) products under the MSK Solar Design Line(TM). Suntech has sales offices worldwide and is a market share leader in key global solar markets. For more information, please visit http://www.suntech-power.com.
May 12, 2008: 05:46 PM EST
Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU), established to manufacture and sell polysilicon for the solar market, and Suntech Power Holdings Co., Ltd. (NYSE: STP), one of the world's leading manufacturers of photovoltaic (PV) cells and modules, today announced that they have amended their polysilicon supply contract to confirm the ten-year term of the contract, which was previously subject to a mutual right for either party to unilaterally reduce the term to seven years. In addition, pursuant to the amendment, Hoku Materials has been granted a right of first refusal to deliver all or any portion of the polysilicon in the form of wafers on commercial terms that are no less favorable to Suntech than it would otherwise be able to obtain. Total amounts that may be payable to Hoku Materials under the ten-year term of the contract are approximately $678 million, plus amounts payable for excess shipments that may be delivered in calendar year 2009.
Suntech and Hoku Materials further agreed to extend the date when either party may terminate the supply agreement if Hoku Materials is unable to complete the financing for its polysilicon production plant until December 31, 2008, and to reduce the financing milestone to $75 million, including the $25 million that was already raised by Hoku Scientific's sale of common stock in February 2008. Prior to the amendment, either Hoku Materials or Suntech had the right to terminate the supply agreement if Hoku Materials was unable to secure an aggregate of $100 million on or before May 31, 2008, to finance the procurement and construction of its planned polysilicon plant in Pocatello, Idaho.
Suntech also agreed to use its best efforts to obtain trichlorosilane, or TCS, in 2008 and 2009 for Hoku Materials's use at its production facility. Hoku Materials plans to build on-site TCS production facilities as part of its polysilicon plant, which are expected to be complete in 2009; however, until Hoku Materials's TCS plant is complete, TCS from a third party will enable the commencement of production faster than otherwise possible. If Suntech is able to obtain TCS for Hoku Materials, then Hoku Materials will allocate to Suntech additional polysilicon production output in 2009 that is in excess of Hoku Materials's pre-existing 2009 customer commitments.
"These amendments reflect our mutual commitment to strengthening the long-term relationship between Hoku and Suntech," said Dustin Shindo, Chairman and Chief Executive Officer of Hoku Scientific. "Locking-in the term at 10 years gives us greater certainty in planning our long-term operations, while Suntech's commitment to help us obtain TCS in 2008 and 2009 could improve our near-term operating results. Allowing us a right of first refusal to deliver wafers gives us the flexibility to vertically integrate a downstream process if we decide to pursue that strategy in the future."
Dr. Zhengrong Shi, Suntech's Chairman and Chief Executive Officer, stated, "Hoku has made tremendous progress over the past year, and we are pleased to strengthen our relationship with them. Confirming the term at ten years gives Suntech more visibility on long-term polysilicon pricing that will further our goal of achieving grid parity in solar."
About Hoku Scientific, Inc.
Hoku Scientific (NASDAQ: HOKU) is a diversified clean energy technologies company with three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. Hoku Materials plans to manufacture, market, and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar markets, sells and installs turnkey photovoltaic systems in Hawaii. Hoku Fuel Cells has developed proprietary fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchange membrane fuel cells. For more information visit www.hokuscientific.com.
About Suntech
Suntech Power Holdings Co., Ltd. is a world leading solar energy company as measured by both production output and capacity of solar cells and modules. Suntech is passionate about improving the environment we live in and dedicated to developing advanced solar solutions that enable sustainable development. Suntech designs, develops, manufactures, and markets a variety of high quality, cost effective and environmentally friendly solar products for electric power applications in the residential, commercial, industrial, and public utility sectors. Suntech offers one of the broadest ranges of building integrated photovoltaic (BIPV) products under the MSK Solar Design Line(TM). Suntech has sales offices worldwide and is a market share leader in key global solar markets. For more information, please visit http://www.suntech-power.com.
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