Financially strapped polysilicon start-up Hoku Scientific and Tianwei New Energy Holdings have closed the deal giving Tianwei a majority investment in Hoku. As a result of the agreement, Hoku has issued orders to resume full-scale construction of its poly plant in Pocatello, ID, and authorize the shipment of equipment that had been placed on hold pending Hoku’s receipt of financing.
The details of the deal involve the issue of 33,379,287 newly issued shares of Hoku common stock to Tianwei, representing 60% of Hoku’s fully diluted outstanding shares. The deal also grants to Tianwei a warrant to purchase an additional 10 million shares of Hoku’s common stock at a price per share equal to $2.52.
In exchange for the shares of common stock, Tianwei has cancelled $50 million of indebtedness that Hoku would be obligated to repay to Tianwei under certain polysilicon supply agreements. Tianwei is also loaning Hoku $50 million through China Construction Bank, as agent.
In addition, Tianwei has committed to help Hoku obtain additional financing that may be required by Hoku to construct and operate its Pocatello facility.
“We are extremely pleased to have closed our financing with Tianwei,” said Dustin Shindo, chairman/CEO of Hoku. “With our near-term liquidity crisis behind us, we can now focus on the execution of our polysilicon and PV systems installation business strategies. We feel that Tianwei is the right strategic shareholder for Hoku’s long-term growth.”
“A strong relationship with Hoku is very important for us,” said Qiang Ding, chairman of Tianwei Group. “We are excited by the long-term opportunity we have to grow a vertically integrated PV business together with Hoku on a global scale.”