Hoku and Solarfun Amend Supply Agreement to Realign Prepayment and Shipping Schedules
31 March 2009 - 10:30PM
Marketwired
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 vertically integrated manufacturer of silicon
ingots and wafers, and photovoltaic (PV) cells and modules in
China, today announced that they have amended their polysilicon
supply contract to modify the timing of when Solarfun is obligated
to pay Hoku $23 million in additional prepayments for polysilicon,
while adjusting Hoku's deadlines for commencing shipments to
Solarfun. Pricing, volume, and other material terms of the
agreement were unchanged.
Solarfun had already paid Hoku $32 million in prepayments
through October 2008. Before the amendment, Solarfun was obligated
to pay Hoku $18 million by March 31, 2009, and an additional $5
million by March 31, 2010, as a prepayment for polysilicon
products. The amendment provides that the $18 million may be paid
in installments, including $5 million that was paid on March 30,
2009, $8 million to be paid in July 2009, and $5 million to be paid
in increments of $1 million in August and September 2009, and $3
million in October 2009. The $5 million that was payable on March
31, 2010, is now payable in January 2010. In exchange for Hoku's
agreement to adjust the prepayment timing, Solarfun has agreed to
extend the date when Hoku is obligated to commence shipments of
polysilicon from September 2009 until March 2010. Solarfun has the
right to terminate the amended supply agreement if Hoku has not
commenced shipments by June 30, 2010, and Hoku has the right to
terminate the agreement, and retain all prepayments received, if
Solarfun fails to pay any of its future prepayments when due.
"Solarfun is an important relationship," said Dustin Shindo,
chairman and chief executive officer of Hoku Scientific. "We were
willing to renegotiate the timing of their near-term prepayments to
ensure our mutual long-term success. We still plan to commence
customer shipments in the second half of 2009; however, delays in
customer payments can impact our plant construction schedule, and
we appreciate their flexibility in moving our required delivery
dates."
"We value Hoku's long-term partnership and appreciate their
willingness to renegotiate our existing contract to reflect current
prevailing market conditions," said Solarfun's chief executive
officer, Harold Hoskens.
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� and Hoku Fuel Cells(TM) are
trademarks of Hoku Scientific, Inc., and Hoku Materials(TM) is a
trademark of Hoku Materials, Inc.
About Solarfun
Solarfun Power Holdings Co, Ltd. manufactures silicon ingots and
wafers, PV cells and modules, and supplies solar system integration
services in China. The Company produces both monocrystalline and
multicrystalline silicon cells and modules and sells its products
both through third-party distributors and directly to system
integrators. The Company was founded in 2004 and its products have
been certified to TUV and UL safety and quality standards.
http://www.solarfun.com.cn
Forward-Looking Statements
This press release contains forward-looking statements that
involve many risks and uncertainties. These statements relate to
Hoku Materials' ability to successfully derive revenues from the
sale of polysilicon to Solarfun; its ability to engineer and
construct a production plant for polysilicon; Hoku Materials'
relationship with Solarfun; its ability to manufacture polysilicon;
the timing of when Hoku Materials would receive $23 million in
prepayments from Solarfun; Hoku Materials' ability to commence
customer shipments in the second half of 2009; its ability to meet
the polysilicon shipment milestones and quality specifications in
its agreement with Solarfun by June 30, 2010, if at all; the
quality of polysilicon to be manufactured; 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 filings with the Securities and Exchange
Commission. 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
Email: Email Contact www.hokucorp.com CONTACTS for Solarfun Power
Holdings Co., Ltd. Paul Combs 86 21-6393-8206 Mobile: 86 138 1612
2768 V.P. Strategic Planning Email Contact or Christensen Kathy Li
480 614 3036 Email Contact or Roger Hu 852 2117 0861 Email
Contact
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