Hoku Slides On Fundraising Plan

Carl Gutierrez, 06.12.08, 8:20 PM ET

Hoku Scientific had a bout of growing pains Thursday.

Shares of the Kapolei, Hawaii-based company sank 7.1%, or 47 cents, to close at $6.19, after it announced through a filing with the Securities and Exchange Commission that it was selling $54.0 million worth of shares.

Hoku Scientific needs the money to build its first polysilicon plant. As of Hoku’s most recent quarterly conference call, the company had agreements to supply Sanyo, Suntech, GEWD and Solarfun. Hoku’s original deadline for raising financing for the planned plant in Pocatello, Idaho, passed on March 31, but Suntech and Solarfun have given it till Dec. 31 to get its ducks in a row. Management has stated it is in communication with Sanyo and GEWD, and that they haven’t expressed any intention to withdraw from their purchase agreements.

In order to hit its pilot production deadline by the fourth quarter of 2008, Hoku believes it has to raise $112.0 million. As of its fourth quarter release, $12.0 million has come from Hoku, while $17 million has come from customer payments.

The negative investor reaction Thursday seemed a bit odd since the company had stated during its last quarterly conference call that the remaining funds would be raised through a combination of a $55.0 million offering, and a $28.0 million contribution from Hoku funds, consisting primarily of a $25.0 million private placement made in February.

In its last quarter, Hoku lost $2.1 million on $621,000 in sales from solar panel installation and related service contracts.