Hoku Corp., a solar energy products and services company, has received an extension of the maturity date of $50 million in loans from Tianwei New Energy Holdings Co. Ltd., Hoku's majority shareholder and a provider of silicon wafers and PV products.
As part of Tianwei's 2009 investment in Hoku, Tianwei provided Hoku with two loans during the first quarter of 2010 totaling $50 million through China Construction Bank, acting as loan agent. The term of each loan is two years.
With approval from China's State Administration of Foreign Exchange (SAFE), the maturity dates of the $20 million and $30 million loans, scheduled to mature this quarter, have been extended one year until the first quarter of 2013. According to the SAFE approval, Tianwei and China Construction Bank are preauthorized to subsequently extend the maturity date for another year, until the first quarter of 2014.
‘The extension of the loans reaffirms Tianwei's continuing commitment to Hoku's long-term success,’ says Scott Paul, CEO of Hoku. ‘Although the extension does not provide Hoku with any additional cash, it does allow us to better manage our liquidity, as we would otherwise be obligated to pay $50 million to Tianwei this quarter.
‘As we source additional funds, our first priority is to pay our polysilicon plant vendors and to continue with plant commissioning activities,’ Paul continues.