euro adhoc: Solar-Fabrik AG
Strategic management decisions
Hoku Scientific
and Solar-Fabrik Subsidiaries Sign Polysilicon Supply Agreement
Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement.
Contracts
20.06.2007
Freiburg, Germany - June 20, 2007 - Global Expertise Wafer Division, a subsidiary of Solar-Fabrik AG (SFXG.DE), a vertically integrated solar power company, and Hoku Materials, Inc., a wholly-owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU) established to manufacture and sell polysilicon for the solar market, today announced the signing of a definitive contract for Hoku Materials´ sale and delivery of polysilicon to Global Expertise Wafer Division over a seven-year period beginning in the second half of calendar year 2009. Under the contract, up to approximately $185 million may be payable to Hoku Materials during the seven-year period, subject to the achievement of certain polysilicon production and quality 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 beginning with the first shipment in the second half of 2009 and continuing over a seven-year period from the first shipment. The contract also provides for an initial direct deposit of $2 million to Hoku Materials upon signing and, subject to Hoku Materials´ successful achievement of production and quality milestones and other considerations, requires that Global Expertise Wafer Division make additional prepayments prior to the first shipment in the amount of $51 million.
"We are pleased to have signed this agreement with Global Expertise Wafer Division, and look forward to supporting the long-term growth and success of the Solar-Fabrik family of companies," said Dustin Shindo, Chief Executive Officer of Hoku Scientific. "Solar-Fabrik´s integration strategy and business model make them an ideal partner for Hoku Materials."
"Securing this supply of polysilicon from Hoku Materials through 2016 will enable us to execute on our global expansion strategy," said Christoph Paradeis, Chief Executive Officer of Solar-Fabrik. "Hoku Materials´ consistent progress over the past several months gives us confidence that they can execute on their polysilicon plan, and we look forward to building an enduring relationship with them."
Under the agreement, Global Expertise Wafer Division´s prepayment obligation is to be backed by one or more letters of credit, and is to be paid to Hoku Materials in installments, subject to Hoku Materials´ successful achievement of certain polysilicon production and quality milestones and other conditions prior to the first shipment in 2009. If Hoku Materials is ultimately not successful in building its planned polysilicon plant, or if Hoku Materials does not meet certain production and quality milestones or timely deliver minimum quantities of polysilicon, the agreement provides that the initial direct deposit will be returned to Global Expertise Wafer Division, the letters of credit may be cancelled and the agreement may be terminated by Global Expertise Wafer Division.
Increasing Plant Capacity
In 2006, Hoku Materials announced its plan to build a plant capable of producing 1,500 metric tons of polysilicon per year. Later in 2006, Hoku Materials announced that it had increased the plant design to be capable of producing 2,000 metric tons of polysilicon per year. Today, Hoku Materials announced that it plans to add up to 1,000 metric tons of additional capacity to produce up to 3,000 metric tons of polysilicon per year. This additional capacity is planned to come online six to twelve months after the first 2,000 metric tons of annual capacity are online at the Company´s Pocatello, Idaho plant, currently under construction.
About Solar-Fabrik AG Global Expertise Wafer Division is a silicon wafer procurement house based in Kuala Lumpur (Malaysia) and is wholly owned by Solar-Fabrik AG. Global Expertise Wafer Division buys recyclable wafers from the semiconductor industry, opening up a new source of raw material previously unavailable to the solar power sector. Solar-Fabrik has grown in only a decade from a solar panel maker to an internationally focused, stock market-listed, fully integrated solar power group. Solar-Fabrik and its subsidiaries and associates span the entire solar power value chain: wafer procurement, wafer recovery, solar cell manufacture, solar module production and system solutions. Solar-Fabrik AG is headquartered in Freiburg, Germany, where the company´s two factories turn solar cells into top-quality solar modules. Solar-Fabrik customers include solar energy specialists and general importers throughout Europe. Module production is ISO-certified and runs entirely on renewable energy, in what is Europe´s first CO2-neutral zero emissions manufacturing facility for solar modules. Solar-Fabrik also provides customers with system solutions based on carefully matched high-quality components. Based in Chennai (India), Poseidon Solar-Services specializes in recovering recyclable wafers. Solar-Fabrik uses wafers recovered by Poseidon to manufacture high-quality solar cells. Singapore-based solar cell manufacturer SEP turns raw wafers recovered by Poseidon into high-quality solar cells. Solar-Fabrik AG holds a one-third stake in SEP. For more information about Solar-Fabrik Group, please visit www.solar-fabrik.de.
About Hoku Scientific, Inc. Hoku Scientific (NASDAQ: HOKU) is a clean energy technologies company that historically developed and manufactured fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchange membrane fuel cells. The Company is currently focusing its business on the manufacturing of polysilicon and the installation of solar modules for the solar market. For more information about Hoku, please visit www.hokuscientific.com.
Forward-Looking Statements This press release contains forward-looking statements that involve many risks and uncertainties. These statements relate to Hoku Materials´ ability to successfully derive revenues from the sale of polysilicon to Global Expertise Wafer Division; its ability to successfully raise sufficient funds to establish polysilicon manufacturing plant and conduct its proposed businesses; its ability to engineer and construct a fully operational production plant for polysilicon; Hoku Materials´ relationships with Global Expertise Wafer Division; its ability to manufacture high quality polysilicon; its ability to meet the delivery schedule in its agreement with Global Expertise Wafer Division; its ability to license any necessary intellectual property rights to enter the polysilicon business; Hoku Materials´ costs to manufacture polysilicon, and its ability to offer pricing that is competitive with competing products; Hoku Scientific´s and Solar-Fabrik´s respective future financial performance; Hoku Scientific´s and Solar-Fabrik´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´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´s filings with the Securities and Exchange Commission. Except as required by law, Hoku 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.
Hoku, Hoku Solar, Hoku Materials and the Hoku Scientific logo are trademarks of Hoku Scientific, Inc., all rights reserved.
end of announcement euro adhoc 20.06.2007 22:01:00
Further inquiry note:
Martin Schlenk
Tel. +49(0)761 4000 207
E-Mail: m.schlenk@solar-fabrik.de
Branche: Alternative energy
ISIN: DE0006614712
WKN: 661471
Börsen: Börse Frankfurt / regulated dealing/prime standard
Börse Berlin / free trade
Börse Stuttgart / free trade
Börse München / free trade