Narrative
Full Description
Project narrative
On October 8, 2010, China Merchants Bank entered into a $13 million USD loan agreement with Hoku Corporation — a now-defunct Idaho-based clean energy company that specialized in polysilicon production for solar panels — to support the company’s project-related expenses. The proceeds were used by the borrower for general corporate purposes, including development costs associated with the company’s polysilicon manufacturing facility in Pocatello, Idaho. The maturity of the loan is three years, and the interest rate is LIBOR plus 2%, with the option for the borrower to elect China Merchants Bank’s prime rate on tranches of $1 million USD or more. The loan was fully secured by a standby letter of credit drawn by Tianwei in Chengdu, China and issued to China Merchants Bank as collateral. Hoku also entered into a reimbursement agreement with Tianwei to cover all interest, fees, and expenses incurred in connection with the standby letter of credit. As of March 31, 2011, the entire $13 million USD was outstanding.
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.