POCATELLO, ID and WUXI, CHINA--(MARKET WIRE)--Jun 13, 2007 -- Hoku Materials, a
wholly-owned subsidiary of Hoku Scientific, Inc. (NasdaqGM: HOKU) established
to manufacture polysilicon for the solar market, and Suntech
Power Holdings
Co., Ltd. (NYSE: STP), one of the world's leading manufacturers
of
photovoltaic (PV) cells and modules, today announced the
signing of a
definitive contract for Hoku's sale and delivery of polysilicon
to Suntech
over a ten-year period beginning in mid-2009.
Under the contract, up to approximately $678 million may
be payable to Hoku
during the ten-year period, subject to the achievement of
milestones, the
acceptance of product deliveries and other conditions. The
contract
provides for the delivery of predetermined volumes of polysilicon
each year
at set prices, using a take-or-pay approach, beginning with
the first
shipment in 2009 and continuing over a ten-year period from
the first
shipment. The contract also provides for an initial deposit
of $2 million
to Hoku upon signing and requires that Suntech make additional
prepayments
for products in the amount of $45 million. Under the agreement,
this
prepayment is to be paid to Hoku in installments, subject
to Hoku's
successful achievement of certain polysilicon quality and
production volume
milestones and other conditions. The prepayment amount is
backed by a
letter of credit issued to Hoku by the Bank of Communications.
The
contract includes a provision that allows for either party
to cancel years
8 through 10 of delivery for any reason. Such cancellation
notice must be
delivered to the other party prior to the end of the fourth
year of
delivery under the agreement.
"We are pleased to have established this relationship with
Suntech, a long
term leader in the solar industry," said Dustin Shindo,
Chief Executive
Officer of Hoku Scientific. "Their rapid growth and dynamic
leadership
team make them an ideal partner for our company."
"Securing a long-term supply of polysilicon from Hoku will
enable us to
continue to expand our manufacturing capacity and execute
on Suntech's
strategic plan," said Dr. Zhengrong Shi, Suntech's Chairman
and CEO. "We
look forward to a strong and enduring business relationship
with Hoku."
Hoku is in the process of building a plant capable of producing
2,000
metric tons of polysilicon per year in Pocatello, Idaho.
Hoku announced in
January the signing of a seven-year polysilicon supply contract
with SANYO
Electric Co., Ltd. that would provide for approximately
$370 million in
payments to Hoku over the term of the agreement. Hoku estimates
that the
establishment of this plant may require total construction
costs of
approximately $260 million. In connection with the financing
of this
construction, Hoku intends to seek debt capital of approximately
$150
million. While Hoku believes that it is on track with the
establishment of
the polysilicon plant, under the agreement announced today,
if Hoku is
ultimately not successful in building the polysilicon plant,
or if Hoku
does not meet certain quality and productivity milestones
or timely deliver
minimum quantities of polysilicon, the agreement provides
that the initial
direct deposit will be returned to Suntech, and the letter
of credit may be
cancelled.
About Hoku Scientific, Inc.
Hoku Scientific (NasdaqGM:HOKU) is a clean energy technologies
company that
historically developed and manufactured fuel cell membranes
and membrane
electrode assemblies for stationary (including residential
and back-up
power applications) and automotive proton exchange membrane
fuel cells. The
Company is currently expanding its business to manufacture
polysilicon and
install solar modules for the solar market. For more information
about
Hoku, please visit www.hokuscientific.com.
Hoku® and Hoku Scientific® are registered trademarks
and Hoku
Materials(TM) is a trademark of Hoku Scientific, Inc.
About Suntech Power Holdings Co., Ltd.
Suntech Power Holdings Co., Ltd. is a leading solar energy
company in the
world as measured by both production output and capacity
of solar cells and
modules. Suntech provides solar solutions for a green future.
Suntech
designs, develops, manufactures, and markets a variety of
high quality,
cost effective and environmentally friendly PV cells and
modules for
electric power applications in the residential, commercial,
industrial, and
public utility sectors. Suntech's majority-owned subsidiary,
MSK
Corporation is one of the top-ranked companies in the building-integrated
photovoltaics (BIPV) space. Suntech's customers are located
in various
markets worldwide, including key markets throughout Europe,
North America,
Japan and China. For more information, please visit
http://www.suntech-power.com.
Forward-Looking Statements
This press release contains forward-looking statements that
involve many
risks and uncertainties. These statements relate to Hoku
Scientific's
ability to successfully derive revenues from the sale of
polysilicon to
Suntech and Sanyo; its ability to successfully raise sufficient
funds to
establish a polysilicon manufacturing plant; its ability
to engineer and
construct a production plant for polysilicon; Hoku Scientific's
relationships with Suntech and Sanyo and other contracting
parties; its
ability to manufacture polysilicon; its ability to meet
the delivery
schedule in its agreement with Suntech; its ability to license
any
necessary intellectual property rights to enter the polysilicon
business;
the quality of polysilicon to be manufactured; Hoku Scientific's
costs to
manufacture polysilicon, and its ability to offer pricing
that is
competitive with competing products; Hoku Scientific and
Suntech's
respective future financial performance; Hoku Scientific
and Suntech's
respective business strategies and plans; and objectives
of each company's
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 or Suntech'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 and Suntech's
filings with
the Securities and Exchange Commission, as applicable. Except
as required
by law, Hoku Scientific and Suntech assume 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.
