It’s a busy afternoon for Hoku Scientific (HOKU). The company announced arevised agreement with Suntech Power (STP) which excludes Suntechfrom having to prepay $30 million for future shipments of polysilicon,but potentially allows Hoku to keep the $2 million already paid whichwill be credited to future shipments. The terms have also been shortedto one year and Hoku isn’t obligated to ship polysilicon until nextJune.
That’s a big hit to Hoku in prepayment revenues, but it lookslike China Construction Bank will make up the difference so that the company can continue getting itsIdaho plant up and running again. The bank will provide Hoku with a$28.3 million credit line which it has 90 days to use and must be repaid by June 14, 2012
Scott Paul, president & CEO of Hoku Corporation, said, “As wecontinue to advance construction of our facility and look ahead to theplanned ramp up to the commercial production of polysilicon, we are very pleased to have the strong backing of both Tianwei and ChinaConstruction Bank. These funds substantially replace the prepaymentsformerly expected from Suntech Power, and are expected to be sufficientto commence initial commercial production runs at our polysiliconfacility. ”
Shares of Hoku are down about 3% in after hours trading, butmaintain a bullish uptrend over the last four months and continues tofind support at the 50 day moving average. It appears traders believethe worst is over for Hoku.
Hoku Scientific (HOKU) Revises Agreement With Suntech (STP), Announces $28Million Loan From China Bank