Hoku Materials, a division of Hoku Scientific, Inc. (NasdaqGM:HOKU) established to manufacture and sell polysilicon for the solar market, and Solar-Fabrik AG (XETRA:SFXG.DE), a vertically integrated solar power company, announced they have increased the total amount of their planned contract to approximately $175 million, and have extended their deadline to finalize a polysilicon supply agreement.
On December 5, 2006, the parties announced that they had signed a non-binding Memorandum of Understanding (“MOU”) whereby Hoku would supply polysilicon to Solar-Fabrik over a fixed number of years at pre-determined pricing on a non-cancelable order. The MOU provided that sales of polysilicon were expected to generate between $120 and $140 million in revenue for Hoku over a several-year period commencing in approximately two years. The parties intended to conclude a definitive agreement within 60 days after signing the MOU. Based on continuing discussions and negotiations, the parties have decided to increase the total amount of the contract to approximately $175 million, and have provided for additional time to complete the definitive agreement. The parties intend to sign a definitive agreement within the next few weeks.
“In light of the positive progress that Hoku has made over the past few months with its polysilicon project, and our continuing discussions, we have decided to increase the volume of our planned polysilicon purchases from Hoku,” said Christoph Paradeis, CEO of Solar-Fabrik. “Due to the modified structure of our planned agreement with Hoku, we requested additional time to finalize the contract.”
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