Hoku Scientific, Inc. (NasdaqGM:HOKU) will supply polysilicon to a Hong Kong based manufacturer of photovoltaic cells and modules for the next eight years under a new supply contract signed by the two companies.
Solarfun Power Hong Kong Limited, a subsidiary of Solarfun Power Holdings Co., Ltd. (NasdaqGM:SOLF) will pay up to approximately $306 million, beginning in mid-2009 at set prices that will decline over the life of the agreement, according to the two companies.
The contract also provides for an initial deposit of $10 million to Hoku on or before December 28, 2007, and requires that Solarfun make additional prepayments for products in the aggregate amount of $45 million, which are to be paid to Hoku in three installments.
Hoku will grant to Solarfun a security interest in its polysilicon assets to secure Hoku’s obligation to repay $55 million to Solarfun as a credit against product shipments over time.
Hoku is in the process of building a polysilicon plant in Pocatello, Idaho that is being designed for annual production up to approximately 2,500 metric tons of polysilicon.
Hoku is currently planning a Phase II expansion of the polysilicon plant to expand capacity beyond 2,500 metric tons.
Hoku’s customers, including SANYO Electric Co., Ltd., Suntech Power Holdings Co., Ltd., Global Expertise Wafer Division Ltd. — a subsidiary of Solar-Fabrik AG — and Solarfun, have collectively agreed to purchase approximately $1.5 billion in polysilicon over a seven to ten year period.
About Hoku Scientific, Inc.
Hoku Scientific, Inc. is a 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.
About Solarfun Power Holdings Co., Ltd.
Solarfun Power Holdings Co, Ltd. 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. For more information visit www.solarfun.com.cn.
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