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Hoku Corporation released a statement advising of the current state of the company, which included a confirmation that it had stopped all construction activity for its Hoku Materials polysilicon production site, which is not yet in commercial operation. As of March 31, the company estimates that it had nearly US$7.7 million in cash and US$278.8 million in liabilities, including US$74.4 million in accounts payable at Hoku Materials.
Because of the company’s failure to pay construction obligations, liens have been filed against the Hoku Materials polysilicon plant, with some of the lienholders beginning foreclosure proceedings in Idaho courts. Although Hoku received an additional loan from China Merchant’s Bank, the company is still taking measures to rectify its financial situation.
"The proceeds of the loan are insufficient to pay down current liabilities, resume construction, or start commercial operations," said Scott Paul, CEO of Hoku. "The loan proceeds will be used to fund working capital requirements while we plan for a restructuring of our liabilities, and the liabilities of our subsidiary Hoku Materials, Inc. We have retained Imperial Capital as our financial advisor to assist with this restructuring effort."
Looking to reduce costs and conserve cash, Hoku Materials terminated nearly 100 of its Pocatello plant employees. Furthermore, the company advised that it has stopped business activities and let its entire staff go at Tianwei Solar USA. However, Hoku Solar will continue to look for opportunities to sell Tianwei’ s module in the market.
"We do not intend to restructure Hoku Solar, as it is operated as a standalone business, which supports its operating cash requirements from sales revenue. Hoku Solar is actively working on several of the largest utility-scale photovoltaic projects in the State of Hawaii, and fully intends to continue delivering its investment-grade PV solutions to its current customers, while continuing sales and marketing activities," stated Paul.