Hoku Scientific (HOKU) Gets A Chinese Bailout, Shares Soar

Hoku Scientific (HOKU) has been thrown a big Chinese life preserver and shares are soaring in after hours trading.  China’s Tianwei New Energy Holdings announced a definitive agreement after the bell today to convert $50 million in prepayments to Hoku into common stock and related warrants (giving the company 60% ownership), another $50 million in debt financing and a commitment to help Hoku obtain additional financing if needed.    Financing will be provided by Tianwei and China Construction Bank for the construction and development of Hoku’s production facility in Pocatello, Idaho.  Hoku is expected to resume full scale plant construction at an accelerated pace sometime next month. 

Said CEO Dustin Shindo:

“Considering the rapidly expanding domestic solar power markets in both China and the U.S., we are pleased by the prospect of a closer strategic relationship with the Tianwei family of companies. A strong, combined presence in the U.S. and in China will allow both Hoku and Tianwei improved, reciprocal access to these key markets.  All things considered, this transaction with Tianwei will enable us to fulfill our commitments to our creditors, vendors, customers, and employees, while retaining a meaningful percentage of the company for our existing shareholders.”

Hoku will continue to trade on the Nasdaq under the symbol HOKU.  Shares are up nearly 60% in after hours trading. 

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