POCATELLO, ID and HONG KONG -- (MARKET WIRE) -- 04/13/09 --
Hoku Materials, Inc., a wholly
owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU), established to
manufacture and sell polysilicon for the solar market, and Wealthy Rise
International, Ltd., a wholly owned subsidiary of Solargiga Energy
Holdings, Ltd. (HKG: 0757), a manufacturer of monocrystalline ingots and
wafers in China, today announced an amendment to the polysilicon supply
agreement in effect between the two companies.
According to the amended contract, the total volume of polysilicon to be
sold by Hoku to Wealthy Rise will be reduced such that up to approximately
$136 million may be payable to Hoku over a ten-year period, subject to
product deliveries and other conditions. The amended contract also adjusts
the date when Hoku is obligated to commence shipments of polysilicon by
three months from March 31, 2010 to June 30, 2010 as well as adjusting the
dates for price adjustments and termination rights in the event of a delay
in commencing shipment. Wealthy Rise has the right to terminate the amended
supply agreement, and recover any prepayments made, if Hoku has not
commenced shipments by October 31, 2010, and Hoku has the right to
terminate the agreement, and retain all prepayments received, if Wealthy
Rise fails to pay any of its future prepayments when due.
Hoku received an initial deposit of $7 million from Wealthy Rise after
signing, and the amendment requires that Wealthy Rise make four additional
deposits in June, August, October and December 2009, each in the amount of
$3.3 million. Wealthy Rise will make a final payment of $200,000 upon
receipt of the first shipment of product from Hoku. Under the agreement,
Hoku will grant to Wealthy Rise a security interest in its polysilicon
assets to secure Hoku's obligation to repay $20.4 million to Wealthy Rise
as a credit against product shipments over time.
"We are pleased to have found a way to move forward in a manner that
benefits both Hoku and Solargiga," said Dustin Shindo, chief executive
officer of Hoku Scientific. "As evidenced by this and other
recently-announced contract amendments, Hoku is focused on working with its
customers and partners to jointly and successfully navigate the current
market turbulence. We look forward to a long and mutually-beneficial
business relationship with Solargiga."
"Hoku has shown an uncommon commitment to the long-term partnership between
our companies. This long-term polysilicon supply contract is important for
Solargiga's future expansion plans. We are pleased to move forward with
Hoku and to have achieved a win-win solution for both parties," said
Wealthy Rise's CEO, Y.I. Hsu.
Hoku confirmed that all of Hoku's customers are now current with their
prepayments, and that the company is in active discussions with other
potential customers for the possible resale of the recaptured polysilicon
capacity, which would include additional prepayments for products.
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.hokucorp.com.
Hoku®, Hoku Scientific®, Hoku Solar(TM) and Hoku Fuel Cells(TM) are
trademarks of Hoku Scientific, Inc., and Hoku Materials(TM) is a trademark
of Hoku Materials, Inc.
About Solargiga Energy Holdings, Ltd. and Wealthy Rise International, Ltd.
Solargiga Energy Holdings Limited (HKG: 0757) is an investment holding
company. The Company, along with its subsidiaries, is engaged in the
trading of, manufacturing of and provision of processing services for
monocrystalline silicon ingots/wafers. Its subsidiaries include Jinzhou
Yangguang Energy Co. Ltd, Jinzhou Rixin Silicon Materials Co., Ltd., and
Wealthy Rise International, Ltd. In June 2007, Solargiga acquired Solar
Technology Investment (Cayman) Corp. (Solartech), Shanghai Jingji Electron
Material Co., Ltd. (Shanghai Jingji) and Jinzhou Youhua New Energy Co.,
Ltd. (Jinzhou Youhua), which comprised, amongst others, established
polysilicon reclaiming and upgrading facilities and monocrystalline silicon
ingot manufacturing facilities. Wealthy Rise International was incorporated
in Hong Kong on June 21, 2007 and engages in the trading of raw materials,
ingots and wafers. www.solargiga.com
Forward-Looking Statements
This press release contains forward-looking statements that involve many
risks and uncertainties. These statements relate to the engineering,
procurement, and construction of Hoku Materials's planned polysilicon
production plant; Hoku Materials's ability to successfully derive revenues
from the sale of polysilicon to Wealthy Rise International, Ltd.; the
timing of when Hoku Materials expects to receive an aggregate of $13.4
million in prepayments from Wealthy Rise International, Ltd.; the ability
of Hoku Materials to engineer and construct a production plant for
polysilicon; its ability to produce polysilicon; its ability to meet the
delivery schedule in its agreements with Wealthy Rise International, Ltd.;
its ability to enter into new contracts for the sale of polysilicon, and to
obtain prepayments from any new customers; Hoku Scientific's future
financial performance; its business strategies and plans; and objectives of
management for future operations. In some cases, you can identify
forward-looking statements by terms such as "anticipate," "believe," "can,"
"continue," "could," "estimate," "expect," "intend," "may," "plan,"
"potential," "predict," "project," "should," "will," "would" and similar
expressions intended to identify forward-looking statements. These
statements involve known and unknown risks, uncertainties and other factors
that may cause Hoku Scientific's actual results, performance, time frames
or achievements to be materially different from any future results,
performance, time frames or achievements expressed or implied by the
forward-looking statements. Given these risks, uncertainties and other
factors, you should not place undue reliance on these forward-looking
statements. In evaluating these statements, you should specifically
consider the risks described in Hoku Scientific's respective filings with
the Securities and Exchange Commission, as applicable. Except as required
by law, Hoku Scientific assumes no obligation to update these
forward-looking statements publicly, or to update the reasons actual
results could differ materially from those anticipated in these
forward-looking statements, even if new information becomes available in
the future.
For more information contact:
Hoku Scientific, Inc.
1288 Ala Moana Blvd.
Honolulu, Hawaii, 96814, USA
Tel: +1-808-682-7800
Fax: +1-808-440-0357
Email: Email Contactwww.hokucorp.comSolargiga Energy Holdings, Ltd.
Tel: 852-3416-2000
Email: Email Contact