Skip to content
AidData logo

Overview

China Merchants Bank provides $10 million USD loan to Hoku Corporation for general corporate and working capital purposes in December 2010

Commitments (Constant USD, 2023)$12,861,385
Commitment Year•2010Country of Activity•United StatesDirect Recipient Country of Incorporation•United StatesSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Dec 20, 2010
Last repayment (originally scheduled)
Dec 19, 2013

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownershipAt least 25% Chinese ownership

Funding agencies

State-owned Commercial Banks

  • China Merchants Bank Co., Ltd.

Receiving agencies

State-owned companies

  • Hoku Corporation

Collateral providers

State-owned companies

  • Tianwei New Energy Holdings Co., Ltd

Loan description

China Merchants Bank provides $10 million USD loan to Hoku Corporation for general corporate and working capital purposes in December 2010

Interest rate (t₀)•2.45719%Interest type•Variable Interest RateMaturity•3 years

Collateral

The loan was fully secured by cash collateral equal to 110% of the loan principal, provided in Renminbi by Tianwei, a Chinese state-owned enterprise and the majority shareholder of Hoku at the time. Hoku also entered into a reimbursement agreement with Tianwei to cover all interest, fees, and expenses incurred in connection with the provision of the cash collateral.

Narrative

Full Description

Project narrative

On December 20, 2010, China Merchants Bank entered into a $10 million USD loan agreement with Hoku Corporation — a now-defunct Idaho-based clean energy company that specialized in polysilicon production for solar panels — to provide additional working capital for the company’s ongoing project development. The proceeds were used by the borrower for general corporate purposes, including support for the construction and operation of its polysilicon manufacturing plant in Pocatello, Idaho. The maturity of the loan is three years, and the interest rate is LIBOR plus 2%, with an option to elect the lender’s prime rate for any portion of the loan not less than $1 million USD. The loan was fully secured by cash collateral equal to 110% of the loan principal, provided in Renminbi by Tianwei. Hoku also entered into a reimbursement agreement with Tianwei to cover all interest, fees, and expenses incurred in connection with the provision of the cash collateral. As of March 31, 2011, the entire $10 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.