CNN Money: Hoku Scientific, Inc. (NASDAQ: HOKU), a diversified provider of clean energy products and technologies including polysilicon for the solar industry, and Solarfun Power Hong Kong Limited, a subsidiary of Solarfun Power Holdings Co., Ltd. (NASDAQ: SOLF), an established manufacturer of both photovoltaic (PV) cells and modules in China, today announced the amendment of their polysilicon supply contract to allow Solarfun until February 15, 2008 to process the required statutory approval for the issuance of a $44 million standby letter of credit. Prior to the amendment, this standby letter of credit, which serves as security for Solarfun’s obligation to pay Hoku $45 million in product prepayments during the period from September 30, 2008 through March 31, 2010, would have been required by January 10, 2008. In exchange for the extension of time, Solarfun has provided Hoku with a $1 million prepayment, in addition to the $10 million cash payment that was made in December 2007. The additional $1 million payment reduces Solarfun’s future $45 million prepayment obligation to $44 million, but increases amounts that have been paid to Hoku Scientific to a total of $11 million since the contract was signed in November 2007.
“We understand that it can be time consuming to obtain approvals through the Chinese government processes as China is still a country under foreign exchange controls,” said Dustin Shindo, Chief Executive Officer of Hoku Scientific. “We are confident that Solarfun will ultimately provide the $44 million letter of credit by February 15, and we appreciate their timely payment of $11 million since the contract was signed.”
“We appreciate Hoku’s flexibility in allowing us the additional time we requested to obtain the statutory approval for the issuance of the standby letter of credit,” said Solarfun’s Chairman Lu Yonghua. “We view Hoku as a key strategic partner for the long-term growth of Solarfun.”