Hoku Materials Inc., a wholly owned subsidiary of Hoku Scientific Inc., and Jiangxi Jinko Solar Co. Ltd., a manufacturer of silicon ingots, wafers and related products in China, have amended their polysilicon supply agreement currently in effect.
According to the new terms of the amendment, the total volume of polysilicon to be sold by Hoku to Jinko will be reduced such that up to approximately $178 million may be payable to Hoku during the 10-year period, subject to product deliveries and other conditions.
In exchange, Jinko will provide discounted wafer manufacturing (tolling) services to Hoku for up to a certain amount of polysilicon per year for each of the 10 years of the contract term. This tolling service will be at Hoku's sole option and will be priced at Jinko's most preferred rate.
In addition to the $20 million in prepayment deposits already received from Jinko, the amendment provides for additional prepayments for products in the amount of $13 million to be paid on or before March 31. As before, Hoku has granted to Jinko a security interest in its polysilicon assets to secure Hoku's obligation to repay $33 million to Jinko as a credit against product shipments.
SOURCE: Hoku Materials Inc.
