SOURCE: Hoku Scientific, Inc.

Hoku Scientific, Inc.

April 13, 2009 07:30 ET

Hoku and Solargiga Move Forward With Amended Supply Agreement

POCATELLO, ID and HONG KONG--(Marketwire - April 13, 2009) - Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (NASDAQ: 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. (HKG: 0757), 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 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™ are trademarks of Hoku Scientific, Inc., and Hoku Materials™ is a trademark of Hoku Materials, Inc.

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. www.solargiga.com

Forward-Looking Statements

This press release contains forward-looking statements that involve many risks and uncertainties. These statements relate to the engineering, procurement, and construction of Hoku Materials's planned polysilicon production plant; Hoku Materials's ability to successfully derive revenues from the sale of polysilicon to Wealthy Rise International, Ltd.; the timing of when Hoku Materials expects to receive an aggregate of $13.4 million in prepayments from Wealthy Rise International, Ltd.; the ability of Hoku Materials to engineer and construct a production plant for polysilicon; its ability to produce polysilicon; its ability to meet the delivery schedule in its agreements with Wealthy Rise International, Ltd.; its ability to enter into new contracts for the sale of polysilicon, and to obtain prepayments from any new customers; 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 respective filings with the Securities and Exchange Commission, as applicable. 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.

Contact Information

  • For more information contact:

    Hoku Scientific, Inc.
    1288 Ala Moana Blvd.
    Honolulu, Hawaii, 96814, USA
    Tel: +1-808-682-7800
    Fax: +1-808-440-0357
    Email: Email Contact
    www.hokucorp.com

    Solargiga Energy Holdings, Ltd.
    Tel: 852-3416-2000
    Email: Email Contact