Tianwei gives loan extensions to Hoku

•  
  Struggling to complete and start polysilicon production at its first facility in Pocatello, Idaho, Hoku has received another financial life-line with major investor, Tianwei New Energy agreeing to extend loan payment terms of US$50 million to potentially to the first quarter of 2014.

Struggling to complete and start polysilicon production at its first facility in Pocatello, Idaho, Hoku has received another financial life-line with major investor, Tianwei New Energy agreeing to extend loan payment terms of US$50 million  potentially to the first quarter of 2014. Two loans, totalling US$50 million were due to be repaid to Tianwei this quarter as polysilicon production would have already been started but delays, often financial-based have dogged the project from the start.

"The extension of the loans reaffirms Tianwei's continuing commitment to Hoku's long-term success," said Scott Paul, CEO of Hoku Corporation. "Although the extension does not provide Hoku with any additional cash, it does allow us to better manage our liquidity, as we would otherwise be obligated to pay US$50 million to Tianwei this quarter. As we source additional funds, our first priority is to pay our polysilicon plant vendors and to continue with plant commissioning activities."

Hoku’s problems don’t end with the start of production. Polysilicon prices have declined over 200% since Hoku broke ground at Pocatello, reaching spot market process below US$30/kg at the beginning of February, 2012. Some small volume producers in Europe and Asia have already shuttered polysilicon plants as prices fell below production costs.