North Coast Solar Stocks

December 5, 2007

Hoku to borrow $185 mln for polysilicon plant

Filed under: HOKU, SOLF, STP — Tags: , , , , , , — Jason @ 6:09 pm

Wed Dec 5, 2007 6:09pm EST

Dec 5 (Reuters) – Fuel-cell parts maker Hoku Scientific Inc (HOKU) said it signed an agreement to borrow up to $185 million from Merrill Lynch for setting up a polysilicon plant in Pocatello, Idaho.

Shares of the company rose 28 percent in late electronic trade.

The facility is expected to produce about 2,500 metric tons of solar-grade polysilicon a year at full capacity and the first shipments are planned for the beginning of 2009.

Subsidiary Hoku Materials, which will build the plant, will get about $35 million in cash from its parent prior to obtaining any of the loan proceeds, the Hawaii-based company said.

Hoku’s customers, Sanyo Electric Co Ltd, Suntech Power Holdings Co Ltd (STP), Global Expertise Wafer Division Ltd and Solarfun Power Hong Kong Ltd, have committed to pay about $240 million for future product shipments to support Hoku’s construction and start-up costs.

Last month, Hoku signed a $306 million, eight-year polysilicon supply contract with SolarfunPower Hong Kong Ltd, a unit of Solarfun Power Holdings Co Ltd (SOLF).

Polysilicon is a key raw material used in making solar cells.

Shares of the company were trading at $11.38 in late electronic trade, after closing down 9.5 percent at $8.87 on the Nasdaq Wednesday.

(Reporting by Saumyadeb Chakrabarty, Esha Dey in Bangalore; Editing by Vinu Pilakkott)

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