Hoku Scientific inks deal with Solarfun
Clean energy products provider Hoku Scientific, Inc. (Nasdaq: HOKU), said it will sell polysilicon to Solarfun Power Hong Kong Ltd., a subsidiary of Solarfun Power Holdings Co., Ltd. (Nasdaq: SOLF), over an eight-year period beginning in mid-2009.
News of the deal sent shares soaring 36.68%, or $2.17, to $8.09 in pre-market trading. Shares of Hoku Scientific have been trading in the range of $2.52 to $14.55 for the past 52 weeks.
Under the terms of the agreement, Solarfun will pay Hoku up to approximately $306 million during the eight-year period, subject to product deliveries and other conditions. The contract provides for the delivery of predetermined volumes of polysilicon each year, with the first shipment in the second half of 2009. Hoku said prices will decline throughout the term of the agreement.
Additioanlly, Hoku said it will grant Solarfun a security interest in its polysilicon assets to secure Hoku's (HOKU) obligation to repay $55 million to Solarfun as a credit against product shipments over time.
Solarfun (SOLF) manufactures of photovoltaic cells and modules in China.
