Hoku Materials Inc., a wholly owned subsidiary of Hoku Corp., and Suntech Power Holdings Co. Ltd. have amended their polysilicon supply contract to remove all milestones, adjust the contract term and reschedule the initial shipment date.
With the removal of the milestones, Suntech is no longer obligated to pay the scheduled $30 million prepayment that was previously committed, the companies explain. However, Hoku will retain the $2 million in prepayments that Suntech has already paid, which will be credited against future shipments of polysilicon. These payments are separate from the $20 million that Suntech invested in Hoku's common stock through a private placement in early 2008.
The term of the agreement was shortened to one year to match Suntech's prepayment of $2 million, and pricing and volume were fixed for the term of the agreement. The agreement will automatically be renewed after the initial term with the same terms unless terminated by either party. Hoku is not obligated to deliver polysilicon until June 2011.