A US-based subsidiary of Hoku Scientific, Inc. (NASDAQ:HOKU) and a Hong Kong-based subsidiary of Solarfun Power Holdings Co., Ltd. (NASDAQ:SOLF) have renegotiated a polysilicon supply contract between Hoku and Solarfun. The renegotiation affects only the timing of payments and deliveries, not the price, volume or other material items in the agreement.
Under the new deal, Solarfun will avoid an $18 million payment to Hoku due today and an additional $5 million due on March 31, 2010. Instead, Solarfun will pay the $18 million in installments: $5 million today, $8 million in July, $1 million in August, $1 million in September, and $3 million in October. The $5 million payment due next March has been brought forward to January 2010.
In exchange for the restructured payments, Solarfun agreed to extend the shipping date for polysilicon from September 2009 to March 2010. Hoku gains the goodwill of the Chinese government, at no cost and little risk. A little something for everybody.
Both Solarfun and Hoku shares are up marginally this morning on thin trading volume.
March 31, 2009