New contract gives Hoku breathing room - Pacific Business News (Honolulu):

utyziluz.wordpress.com
The amendment will accelerate $5 million of the remaining $7 millionn in prepayments that a Chinese company that manufacturessilicojn wafers, photovoltaic cells and modules, owes The amendment will push back an early deadlin e for shipping polysilicon to Tianweij but also adjust the long-term contract price. Tianwei has already paid Honolulu-basef Hoku $74 million in prepayments througghApril 30. Before the amendments, Tianweu was obligated to pay Hoku anadditional $7 million upon the firsft shipment of products in 2010.
Tianwei agreex to pay the $5 million up front in exchange fora long-tern contract price adjustment and eliminated the requirement that Hoku must ship polysiliconn to Tianwei before March 2010. The remaining $2 million will be paid when Hoku starts shipmentesin 2010. Hoku warned last monthj that it was running shor tof cash. The company is in the middle of buildinfga $390 million plant in Idaho that will manufacturee polysilicon and its construction has been financedr mainly by customers like Tianwej who are paying money up front for futurew shipments of materials.
The plant is stil l scheduled to start shipping polysiliconnext year, but the company’ss cash-flow troubles have slowed “The early payment of $5 million has helpeed us manage cash flow for our Hoku Materials subsidiary, especiallyg as some of our other customers were requesting extensions of time make theidr prepayments to us,” said Dustin Shindo, chairmahn and CEO of . “Eliminating the early shipmentg requirementreduces near-term pressure for us to commencs shipments, and allows us to more effectively manage the timing of our capital expenditures as we seek to raisr additional financing for continuingh construction costs.
” Shares of parent company Hoku Scientific HOKU) stock closed down Monday nearly 1 percent to $2.37.