Narrative
Full Description
Project narrative
On May 24, 2010, China Merchants Bank entered into a $20 million USD loan agreement with Hoku Corporation — a now-defunct Idaho-based clean energy company that specialized in the production of polysilicon for solar panels — to support the company’s general financing needs during the construction of its Idaho polysilicon plant. The proceeds were used by the borrower for general corporate purposes and to support ongoing operations, including expenses related to the company’s polysilicon manufacturing project in Pocatello, Idaho. The maturity of the loan is two years, and the interest rate is LIBOR plus 2% (2.28% as of March 31, 2011), with an option for the borrower to instead pay interest at China Merchants Bank’s prime rate on tranches of $1 million USD or more. The loan was secured by a standby letter of credit drawn by Tianwei in Chengdu, China, which acted as collateral for the facility. Hoku also agreed to reimburse Tianwei for all interest, fees, and expenses related to the issuance and management of the standby letter of credit.
Staff comments
1. The entirety of the loan agreement is not available. However, Form 10-K from the company is available for descriptions of the loan. It can be accessed at https://getfilings.com/sec-filings/110715/HOKU-SCIENTIFIC-INC_10-K/. 2. Hoku Corporation was a U.S.-based clean energy company headquartered in Pocatello, Idaho. It began in fuel cell technology before transitioning to solar manufacturing. In 2009, it became majority-owned by China’s Tianwei New Energy Holdings. Hoku declared bankruptcy in 2013, and its assets were liquidated. 3. AidData estimates the interest rate by adding the margin (2%) to 6 months LIBOR.