Hoku contract worth up to $370 million |
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Thu, 18 Jan 2007 14:53
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KAPOLEI, Hawaii (AFX) - A division of fuel cell component maker Hoku Scientific Inc., said Thursday it signed a contract with Sanyo Electric Co. Ltd. for delivery of polysilicon worth up to about $370 million.Company shares surged on the news of the Hoku Materials contract, rising $1.20, or 39 percent, to $4.30 in premarket trading.Under the contract, which will begin in January 2009, payments will be made to Hoku Scientific over a seven-year period for deliveries of specified amounts of polysilicon each year at set prices.The contract also provides for an initial direct deposit of $2 million to Hoku upon signing and requires that Sanyo place about 30 percent of the total purchase amount in an escrow account with Bank of Hawaii. The escrowed funds will be released to Hoku in installments -- if Hoku achieves certain polysilicon quality and production volume milestones.Hoku said it plans to build a plant capable of producing 2,000 metric tons of polysilicon per year at a projected cost of about $260 million.The company said it plans to seek debt capital of about $130 million to help finance the construction.Hoku and Sanyo both have the right to terminate the agreement if Hoku is unsuccessful in raising the additional funds needed to complete construction of the plant within the next six months.Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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