North Coast Solar Stocks

July 10, 2009

Hoku Scientific may sell co on financing woes

Filed under: HOKU, STP — Tags: , , , , , , — Jason @ 6:59 pm

Fri Jul 10, 2009 6:59pm EDT

By Antonita Madonna Devotta

BANGALORE, July 10 (Reuters) – Hoku Scientific Inc (HOKU), a supplier of raw materials to the solar industry, said it may explore the sale of the company as it struggles to raise capital for a polysilicon plant in Idaho, sending its shares down 15 percent.

Last month, Hoku had said it may not be able to continue as a going concern over the next 12 months or secure final funding for the plant.

“We have invested about $200 million into the plant already and have contracts for $1.9 billion over the next 10 years. So, it doesn’t make sense not to get the plant complete based on the potential revenue or gains and the amount of effort we have put into it,” CFO Darryl Nakamoto told Reuters.

The priority was for a possible sale of the Hoku Materials Inc unit, but it would even consider the sale of the parent company at the right price, a Hoku spokesman said by phone.

In a statement, Chief Executive Dustin Shindo said, “We are caught in the same perfect storm that many other companies are facing: The credit crunch, a general economic downturn, pressure on polysilicon and (photovoltaic) pricing, and a global decline in investment capital.”

Hoku also said it was in discussions with several investors for debt and equity financing.

The company said it will begin a temporary slowdown of construction and procurement at the polysilicon production facility in Pocatello, Idaho.

Separately, Hoku also said it amended a polysilicon supply contract with Suntech Power Holdings Co Ltd (STP).

Shares of the company were down 15 percent at $1.95 in trading after the bell. They closed at $2.28 Friday on Nasdaq.

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