North Coast Solar Stocks

April 13, 2009

Hoku and Solargiga Move Forward With Amended Supply Agreement

Filed under: HOKU — Tags: , , , , — Jason @ 7:30 am

Monday April 13, 2009, 7:30 am EDT

POCATELLO, ID and HONG KONG–(MARKET WIRE)–Apr 13, 2009 — Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (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., 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 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. http://www.solargiga.com

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