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Hoku Corporation Receives $10 Million Loan From China Merchants Bank(February 29, 2012)
HONOLULU, HI -- (Marketwire) -- 02/29/12 -- Hoku Corporation (NASDAQ: HOKU), a solar energy products and services company, today announced it had entered into a $10 million credit agreement with the New York branch of China Merchants Bank Co., Ltd. To date, Hoku has borrowed an aggregate of $78 million from China Merchants Bank. The proceeds will be used primarily to pay for operating and capital expenses for the company's polysilicon production plant in Pocatello, Idaho.
Hoku has borrowed all $10 million that is available under the credit agreement, and must repay all borrowed amounts on the five-year anniversary of the effective date of the credit agreement. Loans under the credit agreement are secured by a standby letter of credit drawn by Tianwei New Energy Holdings Co., Ltd. in Chengdu, China and issued to China Merchants Bank, as collateral. Tianwei New Energy Holdings Co., Ltd., is Hoku's majority stockholder.
Interest on borrowed amounts will accrue at the LIBOR rate plus 2%, and is payable annually. Hoku will also pay a facility fee of 2.5% of the total loan amount per annum, payable in arrears with the interest payments, and will reimburse Tianwei for its fees and expenses in providing the standby letter of credit. In addition, the company's polysilicon subsidiary, Hoku Materials, Inc., is guaranteeing the company's obligations to repay Tianwei, and both the company and Hoku Materials are granting to Tianwei a security interest in all of their fixtures and personal property and all proceeds and products from such fixtures and personal property.
Scott Paul, chief executive officer of Hoku Corporation, said, "We are very pleased that Tianwei and China Merchants Bank are providing this $10 million loan to continue funding our business operations and capital expenditures. This is a further indication of Tianwei's long-term support of Hoku's success."
About Hoku Corporation
Hoku Corporation (NASDAQ: HOKU) is a solar energy products and services company with three business units: Hoku Materials, Hoku Solar, and Tianwei Solar USA. Hoku Materials manufactures, markets and sells polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar markets and installs turnkey photovoltaic systems and provides related services. Tianwei Solar USA markets and sells photovoltaic modules manufactured by Tianwei New Energy. For more information, visit www.hokucorp.com.
Hoku, Hoku Solar, and the Hoku Corporation logo are trademarks of Hoku Corporation, and Hoku Materials is the trademark of Hoku Materials, Inc., all rights reserved. All other trademarks, trade names and service marks appearing in this press release are the property of their respective holders.
© Copyright 2012, Hoku Corporation, all rights reserved.
This press release contains forward-looking statements that involve many risks and uncertainties. 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 forward-looking statements include, but are not limited to, statements regarding the Company's long-term financial support from Tianwei New Energy Holdings Co., Ltd. These statements involve known and unknown risks, uncertainties and other factors that may cause the Company'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. These risks, uncertainties and other factors include, but are not limited to, the Company's ability to regain compliance with NASDAQ Listing Rules, and the risks, uncertainties and other factors disclosed in the Company's most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission. 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 the Company's filings with the Securities and Exchange Commission, as applicable. Except as required by law, the Company assumes 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.
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